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Rural and Regional Affairs and Transport Legislation Committee
AGRICULTURE AND WATER RESOURCES PORTFOLIO
Department of Agriculture and Water Resources
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Rural and Regional Affairs and Transport Legislation Committee
Cameron, Sen Doug
Sterle, Sen Glenn
Rhiannon, Sen Lee
Bullock, Sen Joseph
Williams, Sen John
Ruston, Sen Anne
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Rural and Regional Affairs and Transport Legislation Committee
(Senate-Tuesday, 24 November 2015)
AGRICULTURE AND WATER RESOURCES PORTFOLIO
- AGRICULTURE AND WATER RESOURCES PORTFOLIO
Content WindowRural and Regional Affairs and Transport Legislation Committee - 24/11/2015 - Estimates - AGRICULTURE AND WATER RESOURCES PORTFOLIO - Department of Agriculture and Water Resources
Department of Agriculture and Water Resources
CHAIR: I now welcome, all the way from South Australia, Senator the Hon. Anne Ruston representing the Minister for Agriculture and Water Resources; Mr Daryl Quinlivan, Secretary of the Department of Agriculture and Water Resources, and officers of the department. Ms Ruston or Mr Quinlivan, would you like to make an opening statement?
Senator Ruston: No.
Mr Quinlivan : Not an opening statement, but I just wanted to mention a letter that I wrote to the committee after the last hearings. We were thinking about how we could help the committee manage its way through the department and the portfolio's business, because it was clear last time that Senator Cameron, particularly, and I think others, were commenting on the different way the subject matter was structured for this hearing compared to others. We thought about how we might propose an order of appearance that would be more consistent with the kind of practice that people had elsewhere and also lead, hopefully, to a bit less uncertainty about who was going to be available to answer questions and at roughly what times. The proposal was that the hearings could commence with all of the portfolio agencies. The benefit there is that most of the people who were travelling from interstate for the hearing would be in that group and so they would be on earlier in the hearings. We would go to corporate matters and then to the two outcomes in the portfolio. The first one is Sustaining Natural Resources for Longer Term Productive Primary Industries, which is mainstream agriculture policy, followed by Biosecurity, Imported Food and then Water. Those categories are large and we would make sure we had all of the people relevant to those areas available for the duration of the questioning on those outcomes. It is just a proposal for the committee to consider, but we thought it might help after a fair bit of uncertainty, on this side of the table at least, and some difficulties that the committee was experiencing last time. You have got it now for consideration, and if it is okay we could start with that kind of structure in February.
CHAIR: Thank you. I would suggest that is a sensible proposition. Just before we proceed, I just want to make mention today that I met with Helen Bender and Phil Laird. Helen Bender's father tragically suicided with regard to coal seam gas on his farm recently, and my full sympathy to the family. But just to put the department of agriculture on notice—and I know it has nothing to do with today—I now have in my possession, which you have seen, Mr Secretary, some footage of some domestic bores. I have always said, with coal seam gas, how you make good a domestic bore if it is depleted when you have 500 cows waiting to drink at it. This has only been taken in the last couple of days, of domestic bores that normally have a windmill over them, with a trough and a tank. There is obviously a fault line in the gasfield. This water would normally be 50 metres below the ground. It is now spurting out with coal seam gas out of the bores. I just wanted to let everyone know and Australia know that we have a problem when we think that we can make good with a chequebook that sort of a proposition. We have a serious problem. If I could proceed with Senator Cameron.
Senator CAMERON: I am keen to stick to the time frame that has been allocated and get through this tonight as quickly as I can. There is a range of complex questions that always lead to complex answers, in my experience, so I cannot really say that we will get there on time, but let us try.
We will get the Trade and Market Access Division here now. Back on 18 November the minister did an interview with the ABC where he acknowledged that non-tariff barriers, particularly around biosecurity, remain a hurdle to opening up greater market access. Are non-tariff barriers around biosecurity still a hurdle with our relationship with China?
Mr Smalley : Non-tariff measures continue to be issues that we have to work with, with all our bilateral trading partners as they do with us in relation to sanitary and phytosanitary measures.
Senator CAMERON: That is one aspect of non-tariff barriers. Are there other non-tariff barriers?
Mr Smalley : There are, of course. There are technical measures. There are issues such as labelling and registration, product composition, rules—all of those kinds of things.
Senator CAMERON: When you say 'all of those kinds of things', could you provide on notice a list of the tariff and non-tariff barriers that are still a significant problem for our competitive position?
Mr Smalley : Do you mean specifically with China or across all of our markets?
Senator CAMERON: No, with our major markets.
Mr Smalley : With our major markets. That is a very large question, of course, but we can attempt to compile that.
Senator CAMERON: Do we know?
Mr Smalley : There are, of course, as I say very specific things that relate to specific markets, and so we would need to dig into each market and to identify what those barriers might be on each occasion.
Senator CAMERON: If you go to the department's website, you can find all of the changes that have been made to non-tariff barriers. It says the results that you have. It lists access gained or restored in a whole range of areas, including phytosanitary issues and other areas. You have all the gains that have been made there, which are not insignificant.
Mr Smalley : That is correct.
Senator CAMERON: They are not insignificant. Why are you not able to tell us the areas where you still have challenges?
Mr Smalley : We certainly can seek to compile a list of issues that are outstanding and that we are working on, but those are issues that do change from day to day as markets change their regulatory behaviour.
Senator CAMERON: They may change, but you would be able to draw a line of where you are and what you understand the problems are?
Mr Smalley : Certainly and we can do that for you on notice.
Senator CAMERON: I would be surprised if there are issues in terms of resources to do this, because I would have thought that would be your meat and potatoes, if you like, for the market access group, to know what challenges are there. Could you provide us details of what barriers are still in place? Could you start with those countries that we have signed so-called free trade agreements with? If you want the technical term, I suppose it is bilateral preferential trade agreements.
Mr Smalley : Yes.
Senator CAMERON: If you could start with them and provide the details. Then can you give me a quick outline of the non-tariff barriers that still apply in China?
Mr Smalley : Certainly, in relation to various products we are working with China on a range of matters and those include things like developing protocols for the export of cattle for slaughter and feeder, although that was signed in July this year. There are various food safety issues that they raise, including pre-export certification and testing requirements. We still have not gained sanitary access for a range of our meat establishments that we are working on with China. There is a range of these matters.
Senator CAMERON: So, is it correct that this free trade agreement that was going to deliver all these huge benefits did not deal with some of these basics?
Mr Smalley : Free trade agreements do not actually deal with these kinds of sanitary and phytosanitary measures. They deal with tariffs and tariff rate quotas. Just in the same way that we do not negotiate away our scientific biosecurity protocols in free trade agreements nor do other countries.
Senator CAMERON: You get these under the WTO. It is a WTO issue. It is a trade issue.
Mr Smalley : It is a trade issue, but the SPS agreement under the WTO allows us to put in place sanitary and phytosanitary measures that are not negotiated through these general trade agreements.
Senator CAMERON: Part of those protocols that are in place say that they must be based on scientific principles and not maintained without sufficient scientific evidence. Is that correct?
Mr Smalley : That is correct.
Senator CAMERON: Has China provided scientific evidence as to why they are blocking some of our exports?
Mr Smalley : I would think that is something of a double negative question. China will indicate the protocols—
Senator CAMERON: Why is that a double negative? We can make this easy or we can make it hard. I am simply asking: do you understand the details of the reasons why they would be blocking our exports on a phytosanitary basis?
Mr Smalley : For example, in relation to market access for meat, China will indicate the protocols by which they will agree to our meat exports and they will undertake inspection audits of our facilities. At the moment we are not yet in a position for them to have agreed to our extended list of facilities to enable export for some of our meat products. They will actually indicate what the protocols are that we need to meet, and so we then seek to put in place arrangements to ensure that we meet those.
Senator CAMERON: How many officers do you have working on this specific issue with China from the department?
Mr Smalley : I am sorry, I could not tell you that off the top of my head. It relates particularly to another division, the exports division, which is next on the agenda.
Ms Evans : If I may, I think the question might have been broader than just meat as well. For all of the market access issues with China we might involve some people from our plant division who will be working on the scientific issues relating to plant and market access requests. Or if it is related to meat, Mr Read's division will have staff who are working on that particular request. None of those people are necessarily dedicated entirely to one particular commodity going into one particular market. They tend to be, for example, on meat, an expert on meat related issues and so they will deal with those with China and other countries. Similarly, if they are on the plant side they might be dealing with some of those issues to do with whatever it might be into China but also into other countries. It is very difficult to narrow it down to say that on a specific commodity going into one specific market this is exactly how many resources we have dedicated to it.
Senator CAMERON: Thank you. That is helpful. If you cannot measure it, is there any way that you can estimate the resources that we are putting into breaking down these phytosanitary barriers?
Ms Evans : We could make an estimate of our overall level of technical resourcing that we put into this in general. It would be quite hard for us to turn that into an estimate of a particular commodity in a particular place, because it varies, as Mr Smalley said. It depends on the posture of a particular country at the time. We may have had no problems at all for a long period of time and then we may start to have some unexpected issues for a while and so we divert resources to those issues. It is very flexible the way that we respond to the market access issues.
Senator CAMERON: Do you have specialist officers who are allocated to the phytosanitary area?
Ms Evans : The department's role in trade and market access is predominantly about the phytosanitary and sanitary issues—more so than the tariffs, quotas or other things. We are involved in those in a broader policy sense and that is predominantly with Mr Smalley and his division. The technical areas are the exports division for meat and meat products and the plant division for those products, and there are definitely specialists in those roles.
Senator CAMERON: Could you take on notice to provide details of how many specialist officers you have in this area of phytosanitary across the department?
Ms Evans : Yes.
Senator CAMERON: I do not want you digging into the gunnels of the department, but if you could give us, in broad terms, the priorities that have been undertaken by those officers that are specialists in this area. Could you also advise—and I am asking if you know this now, not on notice—what is the estimated value of the exports that are blocked because of phytosanitary measures?
Ms Evans : If I may just add two extra clarifications. You are asking specifically about phytosanitary measures, and that relates specifically to plant products. The other half of the phrase, phytosanitary and sanitary, brings in the meat products. I am assuming that you want both.
Senator CAMERON: Sanitary and phytosanitary.
Ms Evans : The other clarification is that the experts I have referred to do not only work on our export products. They also have a role, generally speaking, in looking at the same kinds of issues on the import side of the equation as well. That is just a clarification. I think we should be able to, on notice, do an estimate for you.
Senator CAMERON: I am trying to get in my own mind, firstly, how you say this and, secondly, what the resources are given that it is a huge area of export blockage. What effort are we putting into it? That is where I am coming from.
Mr Quinlivan : I think you also asked what we thought would be the value.
Senator CAMERON: Yes.
Mr Quinlivan : I doubt we could give a defensible estimate of that, because you would have to make assumptions about trade diversion, alternative markets and so on.
Senator CAMERON: Is that done all the time?
Mr Quinlivan : I do not think we could answer that question sensibly.
CHAIR: Can I ask the department: given that it is a two-way thing with import restrictions and health issues, are we now going to look at the latest spectacle in China where we have this superbug in the chicken industry and whether that is going to spread to other industries? We have got the superbug from the use of too much antibiotics in intensive chicken farming and, allegedly, if it gets out of China it is a threat to the world, to the human race, because it is a super superbug for which at the moment there is no fix. Are you acquainted with that, which was in the news a week or so ago?
Mr Quinlivan : Our chief vet and his people are constantly monitoring events in animal health around the world, and antimicrobial resistance is a major issue for human health and animal husbandry. There is quite a bit of activity happening within the Commonwealth, but within the Australian context, governments and private practitioners generally, and so it is being monitored very closely.
CHAIR: We are talking about our arrangements with China. This has only recently been disclosed. I do not know how long we have had the problem ,but as I understand it is a threat if it gets away to the human race. It is a super superbug. I do not know how super bugs work, but I would like to think, if need be, you take it on notice and come back to us.
Ms O'Connell : If you are referring to the issues associated with the growing concern about the development of superbugs and antibiotic resistance, then—
CHAIR: They have identified one in China right now. It is real. It is in the present time.
Ms O'Connell : Yes. I was going to say that, as the secretary said, our Australian chief vet officer convened a forum last week in Canberra jointly with the Department of Health to look at antimicrobial resistance. As the use of antibiotics increases, the potential resistance and potential for these bugs to take hold increases. Noted in that, though, is that Australia's regulatory measures around the use of antibiotics are better than other places in terms of restricting the overuse in the animal market. I am not talking about the human side.
CHAIR: I am aware that the greatest threat, beside the global food task, to the human race is the low intake of antibiotics in the food chain. But what I am referring to is whether the department is on alert. Is it aware that in China at the present time there is a real crisis with a new superbug which is several times more deadly than anything that has struck before?
Ms O'Connell : We are connected in with all of those alerts and know what is happening.
CHAIR: Could you brief us, maybe on notice, on where we are up to with that and what protective measures there are? They say they do not know whether it has got out of China yet. If you could do that, we would be grateful.
Ms O'Connell : Will do.
Senator CAMERON: Are these sanity and phytosanitary measures done purely on a scientific basis?
Ms Evans : Under the SPS agreement, under the WTO agreement, that is certainly the intent. A properly applied sanitary and phytosanitary measure is scientifically based.
Senator CAMERON: So, do we comply with the agreement?
Ms Evans : Yes, we do.
Senator CAMERON: So, it is all done on a scientific basis in Australia?
Ms Evans : Yes.
Senator CAMERON: Can someone explain to me why the minister would describe it as a subtle art? Minister?
Senator Ruston: I am sorry, but I did not understand what you said then.
Senator CAMERON: Minister Joyce described the sanitary and phytosanitary measures as a very subtle art.
Senator Ruston: A very subtle act?
Senator CAMERON: A very subtle art.
Ms Evans : I am not going to attempt to explain the minister's comment other than to give you the sense that while everything we do is scientifically based and the measures that we expect other countries to put in place also need to be scientifically based, there are a whole range of other issues that come into play when we are trying to agree, for example, with another country about what order we might consider the requests that they have for export market access here. Similarly they would be considering what other things might be going on before they would consider allocating resources towards market access requests that we have. While the final conditions are absolutely scientifically based, there are nonetheless a broader set of non-scientific, if you like, aspects that come into play in what is a long-running negotiation between multiple parties around international trade in agricultural commodities. I can only guess, but that is the kind of the thing I suspect the minister might have been referring to.
Senator CAMERON: I am glad that public servants are starting to guess. That is an interesting change. As to it being a very subtle art, have you provided any briefings on this issue? I do not want any details, but have you provided any briefings to the minister on how this could be a subtle art?
Ms Evans : Not specifically in those terms, no, but we provide extensive briefing to the minister in relation to the various SPS issues that we have with a range of countries at various times.
Senator CAMERON: So, the minister has not received a briefing on that. That is the minister's statement. On the non-tariff barriers in Vietnam, China, South Korea and Japan, could you provide an update as part of that overall question I have given on those areas and could you also provide details as to whether any of our competitors have been given more favourable access than Australia has in these countries? Are there any side deals? Are there any arrangements with other countries that give them more favourable access through the sanity and phytosanitary measures?
Mr Quinlivan : We do not do deals on that basis.
Senator CAMERON: I am not asking what we do. I am asking about our competitors.
Mr Quinlivan : I might let others perhaps with a bit more experience comment as well, but I do not think that any countries would be doing deals on that basis.
CHAIR: Unless they are corrupt.
Senator Ruston: Not that we know about.
Ms Evans : Perhaps the issue is also because they are scientifically based the conditions for different countries vary because it depends on what pests and disease might be present in those countries as opposed to what is in Australia. There is never a direct comparison. You cannot say, 'Are our conditions exactly the same as another country?', because the risks are different.
Ms O'Connell : For each commodity and for each country there is a specific import risk assessment that we do before making a decision that is science based about allowing import and/or what treatments are required, and you would expect that any other nation would do the same thing.
Senator CAMERON: You could have different assessments being made about the threat from one country in terms of their exports?
Ms O'Connell : Into Australia, absolutely, based on the science and prevalence of what diseases are there, what diseases are not there and how they can be treated.
Senator CAMERON: Or the art of the process?
Ms O'Connell : We have been dealing with the science of the process.
Senator CAMERON: I do not know where the minister gets this, but that is an interesting point. Minister Joyce has cited that there is a push from Japan to export wagyu beef into Australia. Are you aware of that?
Mr Smalley : I am not sure that that is on our work program at the moment, but countries express desires to export products without them necessarily being on the work programs of another country. I am not sure whether Ms Bie is aware of the Japan intent.
Ms Bie : I do not have details.
Ms Evans : It is certainly the case that Japan has, at times in the past, expressed interest in exporting fresh beef to Australia. I would have to take on notice exactly where that request is up to.
CHAIR: I take it that it would not be meat that we have sent over there and they have sent it back—our good wagyu that goes to Japan. I have to say, just to put you at ease, if there is any truth in that little whisper I will be on to it like a tonne of bricks.
Senator CAMERON: My understanding is the minister made a statement in relation to wagyu beef on 18 November 2015 on ABC Radio, and it did indicate that this was a common example of the fine balancing act of opening two-way trade. Did anyone pick up the minister's comment on that?
Mr Quinlivan : I think it is the sort of thing you would expect representatives of the meat industry in Japan and the Japanese government to raise with an agriculture minister in the ordinary course of their interaction. I think that is the sense in which the minister was making that statement. I do not think that there is anything—
Senator CAMERON: How can you tell me what the sense of the minister's statement is unless you know, you have read the statement and you understand the context that the minister made the statement? Have you read the statement?
Mr Quinlivan : I have not read the transcript of that press conference.
Senator Ruston: Minister Joyce has made on a number of occasions comments along the lines of Australia being largely an exporting nation and that we have to be mindful of the countries to which we seek to export our products seeking to have reciprocal rights for the benefit of the products and commodities that they produce. Whilst I am not specifically across the actual transcript you are talking about, Minister Joyce has on many occasions made that statement. I think that is a matter that has been publicly stated by many of us, and I think we all understand why.
Senator CAMERON: Is there any impediment to the importation of wagyu beef under the Japanese free trade agreement?
Mr Quinlivan : Again, this would be a matter that would be required to be assessed under our scientific import risk analyses, if Japan does not already currently have access for beef.
Senator CAMERON: We import meat from all over the world.
Mr Smalley : That is right.
Senator CAMERON: If they meet the same standards—
Mr Smalley : I understand there is not actually very much.
Senator CAMERON: We do import meat.
Senator STERLE: We do not need to import.
Mr Quinlivan : Your general proposition is correct.
Senator CAMERON: Yes. My proposition is that if there are no scientific barriers to the importation then the Japanese could import wagyu beef.
Mr Quinlivan : And that we have conducted the appropriate scientific process and the judgment is made, correct.
Ms Evans : The difference is that the trade is only open once the assessment is completed. It is not open until proven otherwise and that is the same with—
Senator CAMERON: What is the length of an assessment period? How long does it take to assess?
Ms Evans : As you could expect, it depends. If it is a complicated product, it might be a couple of years. If it is straightforward and we have done it somewhere else and the risks and so on are similar, perhaps it would be shorter. I do not know if Ms O'Connell would know.
Ms O'Connell : A few months, but there are some that do take a couple of years. There are some where, whilst the assessment is done, it does not pass the assessment.
Senator CAMERON: What about wagyu beef? Is that complicated?
Ms O'Connell : I would have to take that on notice.
CHAIR: I am a little off the pace here. The answer to the question from Senator Cameron I presume is, yes, that when you were in Japan they did apply to the minister to import wagyu meat into Australia?
Mr Quinlivan : No.
CHAIR: There was a conversation where Japan has requested to begin the process to import wagyu beef into Australia—I am waiting down the hallway for it by the way—in much the same way as the United States will try it on again. Until they get a BSE live test, et cetera, they are wasting their time. As I understand it, the answer to your question, Senator Cameron, is there was a conversation, that the minister did put out a statement in which he indicated that the Japanese have applied to begin the process, but it is a due process.
Mr Quinlivan : I am not sure that we have a formal application from them.
CHAIR: No. The conversation has been had to indicate to the minister, when you blokes were up there the other day, that they would like to have a crack at getting their wagyu beef in here. Do not ask me why, but I can assure you that this is very competitive. I have been to Canada and America. They are trying to get their beef in here. It is not because we need their beef, but because they want to level the playing field so that when they get a reactor over there they can say to Japan and Korea, 'Don't take more meat from Australia. Take ours because Australia takes our meat.' It will be the same game. I will be ready for the argument. Just bring it on.
Senator CAMERON: In relation to the comment that Minister Joyce made in relation to the wagyu beef, that this was an example of the fine balancing act of opening two-way trade, there is no balancing act on this, is there? If Japan meets the scientific threshold that we place on that importation, it can come in. Is that correct?
Ms Evans : The statement about whether they meet the requirements that we place on it then it can come in is correct. But as I said before, Japan may have many requests with us at the moment for market access, and I would have to check on what they are. We would equally have many requests for other market access issues with Japan where we would be asking them to spend resources to make the scientific judgments that they need to make to get us there. Some of the judgments, the balance, comes from how far up the priority list the things are that Japan wants to export to Australia and how far up the priority list in Japan, or coming the other way around, are the things that we want to send there. While the outcome is absolutely based on science, the timing with which you might get to a product or start to progress a product is something that has a degree of flexibility.
Senator CAMERON: Does the balancing act that the minister is talking about include saying, 'You build us submarines and we'll take your wagyu beef'?
Ms Evans : I cannot comment on that.
Senator CAMERON: I did not think you could.
CHAIR: Can I just bring a sense of reality to the importation of wagyu beef from Japan? I do not know whether anyone knows the difference between the price of wagyu beef here and the price of wagyu beef in Japan, but it is many times the value of the wagyu beef here. If they are going to import wagyu beef into Australia it would have to be someone who has a very big marijuana farm that could afford to buy the wagyu beef.
Senator Ruston: Can I make a comment in relation to Senator Cameron's last statement. The decision in relation to the build of submarines has nothing to do with the trade arrangements between Australia and Japan.
Senator CAMERON: In relation to kangaroo meat, is there any update on the re-establishment of the kangaroo meat market in Russia?
Mr Read : No. From the last update there is not. We wrote to Russia on about 15 July advising as to our findings from their concerns expressed in relation to a shipment of product from one of those Australian plants and we are still yet to hear from that veterinary agency.
Senator CAMERON: What are the impediments to horticultural products going into China?
Ms Evans : Probably the most significant impediment that we have going into China is actually our ability to maintain and control fruit fly here in Australia. Where we have difficulty in doing that it is often difficult for us to maintain access into China. Many of the discussions that we have with China are about either treatments that we need to apply in order to allow those products to go in or mechanisms that we might have to use to demonstrate that an area is free of fruit fly in order to allow it to go in. That is probably the biggest horticultural issue that we have.
Senator CAMERON: So, this is another phytosanitary issue?
Ms Evans : That is an example of a phytosanitary issue.
Senator CAMERON: Is there work being done to try to resolve that issue?
Ms Evans : Yes, on both sides. We talk with China about the minimum extent of treatment and so on that we might need to apply, but equally we are talking to the industries here about what they are doing to actually comply with what China has set out as its requirements. It is effort that we put in on both sides of the trading arrangement.
Senator CAMERON: Can you provide details of what discussions have taken place with China in relation to this issue?
Ms Evans : I would not be able to do that today. I am not sure whether Mr Smalley can. We could take it on notice.
Mr Smalley : We can certainly take that on notice, but we do have regular conversations with China about various market access requests. Particularly on horticulture, there were some discussions in China within recent months.
Senator CAMERON: That is what I am asking about, if you could provide details of those discussions, particularly on these horticultural products out of China. The free trade agreement did not deal with that, because it is seen as a scientific matter?
Mr Smalley : It is a scientific matter. That is correct.
Senator CAMERON: I will run through these very quickly. On notice can you provide details of the government's investment of $24.6 million to promote business understanding of the recently concluded FTAs in North Asia and to assist business to access and maximise their benefits?
Mr Quinlivan : That is probably for Foreign Affairs and Trade.
Senator CAMERON: So, you do not do any of this under market assess?
Mr Quinlivan : I think that is a generic program. It is not specific to agriculture and food.
Ms Evans : We are supporting them in implementing that measure, but the measure itself is the Department of Foreign Affairs and Trade.
Senator CAMERON: Do you engage with them on that?
Ms Evans : Yes, we do. For example, I know they have been running a series of roadshows to explain what opportunities are available under the free trade agreements. We have had an agriculture department representative at those roadshows in case questions come up about the phytosanitary, sanitary issues and other issues.
Senator CAMERON: Have you done any analysis? Even though you are not running the program, surely you have done some analysis as to what benefits are coming out of this program for your industry?
Mr Smalley : No, not specifically out of that program. We have not done analyses of that. We have done analyses of where the opportunities are for our industries. Again, as Mr Quinlivan said, the benefits of free trade agreement, in terms of how they divert trade, are very difficult to actually specify in that sense. To actually then be able to pin it to a particular program of advocacy is another story.
Senator CAMERON: But surely, if we are going to spend close to $30 million on promoting agricultural exports—and that is what this is—have you done any analysis of how the agricultural sector has benefited?
Ms Evans : We certainly did some analysis in looking at the outcomes of the free trade agreements.
Senator CAMERON: No, that is not what I am asking. The outcome of the free trade agreement is that you just get some econometric modelling and you say that we are going to gain this, that and the other. This is a spend of $24.6 million. What did the agricultural sector benefit from that spend? Do you know? Have you looked at it and, if not, why not?
Ms Evans : The program is not specifically about agriculture. It is a broad program about promoting the free trade agreements. No, we did not do any specific analysis about what the ramifications of that would be on the agricultural sector. We saw it as a mechanism for allowing agriculture to start to understand the greater benefits of the free trade agreement that we believe are there. We did not do any further analysis beyond that.
Mr Quinlivan : If you would like an assessment of the additional market access opportunities that are likely to become available under the agreement we could provide that. If your question is about the actual commercial benefits to our industries from the free trade agreement, that would also be a good question to ask in the future when people have had an opportunity to look at it. Because it takes quite a while to prepare for a new market and negotiate commercial distribution arrangements and so on. In the future that would be a good question to ask, because people will have had a chance to take advantage of those commercial opportunities, but it does not happen immediately on signature of an agreement.
CHAIR: It would also depend on the non-market currency terms of trade. We are dealing with a non-market currency when you are dealing with China and they can play with us if they want to.
Senator CAMERON: I will put the rest of my questions on notice and let the chair move to where he needs to move to. The white paper states that the government is investing $188.5 million to set up five industry growth centres including a food growth centre to lift industry competitiveness and for the food agribusiness sector to capture high value export opportunities. Where and when will the five industry growth centres be established and are these centres being co-funded with industry? Do you have it on notice? Could you provide details of the $50 million boost to the Export Market Development Grants Scheme and how this has been a benefit to the agriculture, fisheries and forestry sector? Could you provide details of the $200 million boost for the Export Finance and Insurance Corporation to better support small and medium exporters and how this funding will be of benefit to the agriculture, fisheries and forestry sectors?
Mr Quinlivan : We will endeavour to answer each of those as they relate to this portfolio.
Senator CAMERON: Sure. Could you provide detail on the $50 million for small exporters, including grants to help improve market access for small exporters, and could you list the grants issued and the rebates provided? What role is the department playing in promoting Australian products overseas? You can take that on notice. Can you provide detail of where and when the five agricultural councillors will be appointed?
Mr Quinlivan : I think we might have answered that question last time.
Senator CAMERON: Did you?
Mr Quinlivan : Yes, but we will provide an answer.
Senator CAMERON: Again, if you have answered this one, that is fine. How were the countries chosen and what were the criteria? Will these commissioners have travel budgets? Are there sufficient applicants within the department of agriculture or will the applicants be sought outside of the department?
Mr Quinlivan : We have made those appointments.
Senator CAMERON: You have made them?
Mr Quinlivan : Yes.
Senator CAMERON: From inside or outside of the department?
Mr Quinlivan : Inside.
Senator CAMERON: Good. Will the applicants be given proper language training or do they have language skills?
Ms Evans : We do not provide language training, but they are supported in country with locally engaged staff who have language skills and that has been an effective model to date.
Senator CAMERON: Can you provide details on notice of the skills and the qualifications of the agricultural councillors? Thank you.
CHAIR: Senator Rhiannon.
Senator RHIANNON: My questions are about kangaroo products. How many export permits, both single use and multiple use, have been issued for the export of kangaroo and wallaby products in the last 12 months?
Mr Read : I think the questions that you are asking now are the ones that were on notice.
Senator RHIANNON: Yes. I wanted to go through them to speed up the process somewhat.
Mr Read : With the question that you are asking, an element of the export permit is run by environment. We issue an export permit and certificate based on ex-stock, and to my recollection about 456 of those certificates have been issued in the last 12 months.
Senator RHIANNON: So, 456?
Mr Read : Yes.
Senator RHIANNON: So, that is 456 certificates?
Mr Read : It is 456 consignments.
Senator RHIANNON: Consignments?
Mr Read : Yes. I will check that number for you.
Senator RHIANNON: I am interested in how many businesses that covers.
Mr Read : I would probably, again, need to take that on notice, but there is no more than three of four kangaroo exporters at the present time.
Senator RHIANNON: Does that mean that there are no permits? I am also trying to understand the process here and not just the numbers involved. I will tell you why. My next question is: how many of the permits are currently being used or are alive? I thought there were permits where they may not be used yet and then there are permits where the trade is active.
Mr Read : That is the point that I am seeking to make. There is, as I understand it, in terms of CITES, there are export permits that are issued from the environment department. In terms of the department and our process, if we have an export registered kangaroo plant then once that consignment is in a position that it is ready for export to a particular market they will raise a request for that permit against that market and then a range of checks and balances will be progressed to ensure that that consignment is, in fact, aligned with the requirements for that market before the permit is then validated and the certificate issued. So, it happens on a consignment by consignment basis. You do not have half a permit used and then you have another volume of product that then balances out that permit. It does not quite work that way.
Senator RHIANNON: So, just going back to the February estimates—this is a statement from the February estimates:
The Australian government, through the department of agriculture, has allocated $143,000 to the Kangaroo Industry Association of Australia towards funding the Californian legal firm Manatt, Phelps & Phillips to provide resources, expertise and contacts in support of government action in California to lift this ban.
I understand that the then secretary for the environment, Senator Birmingham, made representations in California regarding kangaroo products in December 2014 and our current prime minister, who was then the Minister for Communications, Mr Turnbull, made representations in January 2015. In the answer in February this year you spoke about the resources, expertise and contacts. Can you advise what resources were provided to those two ministers to undertake that work.
Ms Bie : As normally happens when an Australian government minister travels, we contribute towards briefing, but this department does not have officers based in California, and so the Department of Foreign Affairs and Trade would have worked with the delegates in California.
Senator RHIANNON: So, in response to my estimates question, what were you referring to when you made reference to providing resources, expertise and contacts in support of government action in California to lift this ban?
Ms Bie : We work with governments on trade and market access issues continually. There is ongoing activity day to day on kangaroo market access as well as access on other issues.
Senator RHIANNON: I was trying to work out what happened when those two ministers arrived in the States. Were you saying earlier that once they get to the States it is DFAT that helps them and you do not help them?
Ms Bie : Yes. I do not know the specifics of the delegation arrangements. Usually Department of Foreign Affairs and Trade or whomever is posted in the country which they are visiting or the region that they are visiting or a delegation is visiting would support the delegation. A department of agriculture officer is not posted in California at this stage. The Department of Foreign Affairs and Trade are posted there.
Senator RHIANNON: Did the Australian government advise any Californian lawmakers that this payment had been made to influence Californian legislative action?
Ms Bie : We are not aware of any advice given to lawmakers about the grant that had been provided.
Senator RHIANNON: You are not aware of any advice?
Ms Bie : You are asking if advice was provided?
Ms Evans : I think what Ms Bie is saying is that there was no formal notice from a minister, but certainly we published the fact of the grant in the public domain. It was certainly public knowledge that that grant existed. I think what Ms Bie is saying is that we are not aware whether there were any informal references to it or anything like that, but in terms of a formal attempt to draw attention to that grant that did not happen.
Senator RHIANNON: So, we do not have any formal attempt to draw it to the attention of the California lawmakers. Is that a fair summary?
Ms Bie : Not through ourselves. The Kangaroo Industry Association of Australia registered with the Fair Political Practices Commission through their general reporting requirements.
Senator RHIANNON: Just so that I understand how this works, from your point of view is it just a matter that you have given money to the KIAA for their legal work with that firm and then after that you do not have anything to do with it? Is that how it works?
Ms Bie : We did not specifically give them money for work with that firm. We provided the grant to the Kangaroo Industry Association of Australia so it could engage a suitable representative to undertake work towards assessing, reporting on and developing potential options for the kangaroo industry of Australia to consider and potentially act on to prevent kangaroo products from being banned in California. That was the specific purpose of the grant, and then after that it was really up to the Kangaroo industry of Australia to make the decisions about what they did.
CHAIR: Could I just notify the committee that you have two minutes to go. You can put your questions on notice.
Senator RHIANNON: So, it was given specifically with regard to lobbying the government to lift the ban?
Ms Bie : No. I just read out specifically what the purpose of the grant is. The purpose of the grant was to engage a suitable representative to undertake work towards assessing, reporting on and developing potential options—that is a summary of what is in the document—for the kangaroo industry association of Australia to consider and potentially act on to prevent kangaroo products from being banned in California. The early answer, perhaps at last estimates, was slightly inaccurate in the sense of referring to the grant being specifically about using Manatt. That was a further decision of the Kangaroo Industry Association of Australia.
Senator RHIANNON: From what you have just said and from what I am reading here from February it sounds like you are still acknowledging what you acknowledged in February that it is about supporting government action in California to lift this ban. You may not have used the words 'to lift this ban', but the intent of the KIAA is to do that. Are you disputing that is what you are doing or are we acknowledging that it is the same sort of work? I am just trying to clarify because my follow up questions on notice would obviously be different if you are now saying that the answer you gave in February is incorrect.
Ms Bie : I think the answer in February was summarised in the intent. The work was about kangaroo market access. When you first asked the question it sounded as though we specifically funded a particular firm. That is not the case. As Deputy Secretary Evans summarised, it was about broader work and it was the kangaroo industry that chose the firm to undertake that work.
Senator RHIANNON: Can I just clarify one phrase?
CHAIR: One more and that is it.
Senator RHIANNON: So, is it the phrase that is incorrect? Back in February you said:
The Australian government, through the department of agriculture, has allocated $143,000 to the Kangaroo Industry Association of Australia towards funding the Californian legal firm Manatt, Phelps & Phillips to provide resources, expertise and contacts in support of government action in California to lift this ban.
Am I correct in understanding that you are saying that you just gave KIAA the money; that they were the ones who decided to give it to the legal firm and you did not? Is that the case?
Ms Evans : That is correct, yes.
Senator RHIANNON: Thank you.
CHAIR: If we could now move to export division. We will open with Senator Cameron.
Senator CAMERON: The department set about redesigning the charges for biosecurity and export certification activities. How long did the redesign take? What was the process for the redesign?
Ms Evans : If I can just clarify. Are you asking about the export regulation review?
Senator CAMERON: The export certification.
Ms Evans : From a couple of years ago? Of 2009?
Senator CAMERON: Yes.
Ms Evans : There have been a couple of things. We have done one review, which Mr Read can give a summary of, which is finished and another one is on the way.
Senator CAMERON: The one where the charges are to be increased on 1 December. Does that narrow it down?
Ms Evans : Yes, it does. So, what was the specific question?
Senator CAMERON: How long did that review take? Was it a review or a redesign? What did you describe it as?
Ms Evans : In the case of the meat arrangements, it was just a review, because that structure was redesigned in the earlier process that happened in 2009-10. That process ran over probably a year and a half. This time the review of the meat arrangements has probably taken us around 12 months.
Senator CAMERON: So, 12 months?
Ms Evans : Yes.
Senator CAMERON: How many officers were engaged in that review?
Ms Evans : I would have to take that on notice. It involves some individuals from the meat exports area, also some people from our finance and business support division and we have had a taskforce running on it.
Senator CAMERON: You had a taskforce?
Ms Evans : Not specifically on meat, but we had a taskforce running across all of the cost recovery areas.
Senator CAMERON: So, the review that you carried out was over 12 months and it included a taskforce. Can you provide details of how much that review cost?
Ms Evans : Yes.
Senator CAMERON: Is the increase going to apply from 1 December?
Ms Evans : Yes.
Senator CAMERON: Did you say that you set up a terms of reference for the review?
Ms Evans : The review is done consistently with the cost recovery guidelines that are set out by the government. They are in the public domain. We followed the steps that are outlined in that rather than having a separate terms of reference as such.
Senator CAMERON: What engagement did your internal review have with the industry?
Ms Evans : Extensive consultation. We have standing consultative committees with each of the commodity groups. In the case of meat, we used the meat related consultative committees and engaged with them throughout the process. I should also clarify that in the case of meat there is not very much movement in the fees. I will defer to Mr Read to clarify, but there was not a lot of movement in that particular example.
Mr Read : It is probably worth deferring to our finance area, because in terms of the food areas—meat, fish, dairy—there was no movement in fees, but there would have been movement on the plant side.
Mr Ryan : Just a couple of clarifications. The amendments to fees and charges are scheduled from 1 December. There are increases, but there are also decreases. The ones that Mr Read and Ms Evans just referred to are most of the food arrangements. There will be decreases in their fees from 1 December, but there will be some that will have increases such as the plant related cost recovery arrangements.
Senator CAMERON: So, did the department respond to various concerns that were raised in the extensive consultations?
Mr Ryan : Yes. The consultation went on for quite a while. We said 12 months. There were quite a lot of meetings that we went through during that period. The initial stuff focused on the structure of the fees and charges and what we were looking to change. It did not really get into what the prices for each of them might be, but it certainly talked about the approach that the department was taking. We have quite a number of arrangements. We were trying to make them similar in the approach to how we cover the different activities that we undertake in each of them. It certainly took a lot of feedback along the way as part of that. As we moved closer to implementing from 1 December, from this financial year onwards, when we had our consultative sessions—we had public information sessions as well—we talked more about the fees and charges and what that impact would be on the different groups. We did have quite a bit of feedback.
That resulted in quite a few changes along the way. The department has been very flexible in the approach to consultation and we have taken a lot of feedback on board. Having said that, there were obviously some things that the different groups would look to get from a fee review that we could not necessarily accommodate within our framework but, by and large, we took on a lot of feedback and made a lot of changes as a result of that consultation process.
Senator CAMERON: I think Ms Evans has indicated publicly that the stakeholders claimed they needed more time to make changes to their own systems and processes to give effect to the changes. Is that correct?
Ms Evans : I cannot remember if they needed more time or we needed to give them enough time, but certainly we knew we needed to give them enough time. As part of that consideration, we moved the dated from 1 November to 1 December.
Senator CAMERON: Did you get details as to what the complexities were in the system changes?
Ms Evans : Mr Ryan can explain that.
Mr Ryan : The change in the date was mainly because we had finalised the consultation and it had, by and large, been done. There was a government process that sat behind that and approvals that we needed to take as part of bringing it up from 1 December.
Ms Evans : I think the question is about the change in the processes.
Mr Ryan : Yes. So, again, in bringing it in from the original date of 1 November there are a lot of things that each of the businesses that deal with us have to change in their system. If they are on-charging the cost to their customers they need to make changes to their system. They need to quote a certain amount of time out. They need time to be able to change their prices. If someone is looking to import something in the country, say, in January or December or later in the year where they know what the costs possibly would be under the new fees and charges. The changes to the way they went about running their business and making changes was the reason why we slipped it another month in terms of implementing it from 1 November to 1 December.
Senator CAMERON: I do not want to make too much of this, but I would have thought that it would not have been a complex matter in dealing with increases or decreases in charges.
Mr Ryan : Some of it was actually changing the structure. For example, in the import space, there were a number of fees that we combined into a simpler structure. I think, off the top of my head, there might have been about four or five different fees for importing things into the country and we consolidated that into two or three fees. There was some change in the structure as well as the prices.
Senator CAMERON: Mr Ryan, did you head up this internal review?
Mr Ryan : I was involved in the team. It went across the department, but I was involved from the modelling side in terms of what the fees and charges looked like under the model that we put forward to industry groups.
Senator CAMERON: So, were you the go to person on this issue?
Ms Evans : Mr Ryan is always the go to person when it comes to the costs themselves. We had a taskforce, as I said. The leader of that taskforce was Ms Julie Gaglia. She is not here today, because the cost recovery item was not listed. She led the taskforce and Mr Ryan was one of the key contributors from other parts of the department.
Senator CAMERON: How many people were on the taskforce?
Ms Evans : I said earlier that I would take that on notice. It varies depending on the workload at the time.
Senator CAMERON: But Mr Ryan is here. He was on the taskforce.
Ms Evans : No, he was not on the taskforce.
Senator CAMERON: Who is here that was on the taskforce?
Ms Evans : No-one present was on the taskforce per se.
Senator CAMERON: Do you have a rough idea?
Ms Evans : Yes. I think there was around five to 10 people.
Mr Ryan : Yes, at any one time.
Senator CAMERON: I will not hold you to that, Ms Evans, but can you provide the details of that along with the cost of the review?
Ms Evans : Yes.
Senator CAMERON: So, five to 10 people. Were they working full time?
Ms Evans : Yes.
Senator CAMERON: For 12 months?
Ms Evans : As I said, in peaks and troughs.
Senator CAMERON: Were you confident of the methodology that you used to make these changes?
Ms Evans : Yes.
Mr Ryan : Certainly confident in terms of the way the model was put together against the Australian government's cost recovery guidelines, which is our main basis for how we put the model together, and certainly in putting the arrangements together, having them signed off and implementing them they had to be signed off by the Department of Finance as well as someone who looked at it from that perspective.
Senator CAMERON: So, it also had an internal review?
Mr Ryan : Yes. In terms of any changes to cost recovery arrangements, depending again on the extent of it, whether or not it is just a small/slight adjustment where you might not need to go to the Department of Finance, but if it was something more substantial like the department has undertaken the Department of Finance would need to sign that off.
Senator CAMERON: So, you are confident in terms of the model that you used. You are confident about the processes that you undertook. You are confident about the consultation. Are we confident about the outcomes?
Mr Ryan : Confident in the sense of if you went and asked everyone that was subject to the fees and charges whether they were happy with the outcome? Not so much. But given the explanations around why the department went down that particular path and what sat behind the logic for putting them forward, yes.
Senator CAMERON: Was the logic cost recovery?
Mr Ryan : Yes.
Senator CAMERON: You are confident that you did not make any mistakes in overcharging people in terms of cost recovery?
Mr Ryan : The fees and charges are not yet in place, but certainly with the way the model is put together we have not designed it to overcharge anyone in any circumstances.
Senator CAMERON: That is good.
Mr Ryan : I might just say that there will be a number of outstanding items that we will probably need to work through over the next couple of years, and that is in terms of where things are evolving and how things might change, particularly in terms of where there might be scope for increased cost recovery. There are certainly some things left to be done out of the process. I would not say we certainly finalised everything, put a nice bow on it and said, 'It's perfect now for the rest of the time.' It is a matter for the department to monitor it on a quarterly basis, letting those industry consultative committees know where things are up to, how they are tracking, what our forecasts are showing, how that might look and how that might impact as we move through the arrangements.
Senator CAMERON: So, you have indicated that you are confident. It was a very extensive program. It has been signed off by the Department of Finance. Why is the minister not confident? Has the minister given any reasons why he is not confident about all that work that has been done—on a broad brush about a million dollars' worth of work?
Ms Evans : The minister signed off on the cost recovery arrangements. He has announced a further review on the plant and meat arrangements, and I would say that is to give additional confidence to the stakeholders in our work.
Senator CAMERON: Who is going to do the independent review?
Ms Evans : We are aware of that for the plant one. We do not know for the meat one as yet, because that will happen a little later, but Mr Ryan can respond to that.
Mr Ryan : Yes. We have engaged an accounting firm to undertake independent review of the plant cost base; that is, the plant export program cost base.
Senator CAMERON: Is there a contract with the firm?
Mr Ryan : There is a terms of reference, yes.
Senator CAMERON: A contract?
Mr Ryan : And a contract, yes.
Senator CAMERON: Can you provide details of the terms of reference?
Mr Ryan : Certainly.
Senator CAMERON: What is the value of the contract?
Mr Ryan : I would have to take that on notice, but off the top of my head I think it was $70,000 to $75,000.
Senator CAMERON: This is on top of a year's worth of salaries within the department. This is another $75,000 contract?
Ms Evans : That is right.
Mr Ryan : Yes.
Senator CAMERON: I do not want to know what advice you provided, but did you provide any advice to the minister in relation to this independent review?
Ms Evans : Based on the consultations that we have been having with the plant industry in particular, it was our view and our advice to the minister that it would be a useful step to reinforce our own confidence with the confidence of an independent review as well.
Senator CAMERON: So you spent in rough terms a million dollars—and I will not hold you to that—and you can get an independent review of your work for $75,000 to give people confidence. You have to be kidding me.
Ms Evans : No. We did canvass this with the industries affected. We put it to them that we would potentially do an independent review, and they were very supportive of us putting that proposal forward and so we did.
Senator CAMERON: So, you provided advice to the minister that he should do the independent review?
Ms Evans : That it would be a useful step, particularly in managing the stakeholder relationships, for us to complete the independent review.
Senator CAMERON: So, what are the issues in the stakeholder relations that you want to manage?
Ms Evans : As Mr Ryan has referred to, not everybody is necessarily happy with exactly what the fees are that they might be facing themselves and so they are looking for additional assurances that the fees have been accurately calculated.
Senator CAMERON: Basically it is external. Even though the Department of Finance signed off on it, and you have spent about $1 million on this, you have to go external to satisfy the stakeholders?
Ms Evans : The people who pay the fees; that is right.
Senator CAMERON: That you are not dudding them? Is that the issue?
Mr Ryan : The feedback by the industry groups themselves was that when we had done the last fee review, particularly in this plant arrangement that we are talking about now, they had actually an individual sit on the consultation committees during that process and they acted as an independent adviser to that group. They just said that in terms of finalising this one they would like to have that done again. In terms of the department finalising it, putting it in place and having it ready from 1 December, part of it was to have that independent review.
Senator CAMERON: Who was complaining about it? Who was asking for the independent review?
Mr Ryan : In particular, it was the plant export industry representatives.
Senator CAMERON: Do you always capitulate to vested interests like this?
Mr Ryan : Amongst that consultative committee it covers quite a large group. It is both horticulture and grain. So, you have representatives across grain, nuts and timber products. On the horticulture side you have table grapes, citrus, all other commodities and vegetables that are exported. It was something that was broadly across that group in terms of recommending or looking for that independent review.
Senator CAMERON: Is the plant review the $70,000 one?
Mr Ryan : Of the cost base, yes.
Senator CAMERON: It is a $70,000 contract to do the plant review. That is going to be, as I understand it, completed in February 2016.
Ms Evans : That is right.
Senator CAMERON: The meat review is scheduled for June 2016.
Mr Ryan : To be completed by June 2016.
Senator CAMERON: What is the projection? Have you called for tenders on this?
Mr Ryan : For the meat?
Senator CAMERON: Firstly, did you call for tenders on the plant review?
Mr Ryan : No. The plant review was done through a firm that we had engaged in the previous round, where I talked about the fee review four years ago. It was the same firm with the same expertise. We accessed them off a panel arrangement which had gone through all the checks and balances in terms of meeting the procurement requirements.
Senator CAMERON: It was a panel. This is a tender? Is that consistent with public service guidelines on this?
Mr Ryan : Yes.
Senator CAMERON: How much will the meat review be costing?
Mr Ryan : At this stage I am not sure, because we have put together the terms of reference, but given that we are looking to do that after we finish the plant review we actually have not gone to get a feel for what that might be.
Senator CAMERON: Can you provide the details of the terms of reference for the meat review, and if the cost of the contract is determined prior to the return of the questions on notice can you provide the costings of this further contract? If the review finds that the fees are inconsistent or are not justifiable—I think would be the word—will exporters be compensated for the period between December and June?
Ms Evans : I think that is a hypothetical question.
Senator CAMERON: No, it is not hypothetical.
Ms Evans : We think that the fees are accurate.
Senator CAMERON: You think the fees are accurate, but you do not have the confidence—
Ms Evans : We do have the confidence, but we have responded to the need to provide greater assurance to the people who pay the fees and with their endorsement, because they will pay for the cost of the reviews.
Senator CAMERON: They will pay the cost of the reviews?
Ms Evans : Yes. It will be cost recovered through the process. That is right.
Mr Ryan : And certainly the consultative committee were aware of that and that is why we have tried to keep it very tight in terms of what they need to do and make the costs not too high, because ultimately that would be cost recovered. In just giving you a little bit of background that might help, in putting together and finalising the models for the plant arrangement we have two different arrangements. One is grain and seed and the other is horticulture. A lot of the contention that comes—and this came up earlier in the discussions today around team matters—where you have a number of people working across those arrangements in the department and so ultimately when you pull together the costs of those arrangements it involves a type of allocation process where you need to allocate people's time to each of those arrangements.
That is the main thing that those consultative committees wanted further assurance on; that the way the department does its allocation to each of those arrangements stacks up. Each of them thought that they were cross-subsidising the other industry groups. It is to give them a bit of assurance around our allocation process, which is really just pure accounting.
Senator CAMERON: So, basically they do not trust each other?
Mr Ryan : They would like to see some evidence that someone in the panel—
Senator CAMERON: They do not trust the department? It is not really hypothetical. I think people would want to know if there is a problem. You claim it is a robust process. Obviously it is a very expensive process that I would estimate—and I am not going to hold you to this—cost close to a million dollars if not more to undertake this process. How can a $70,000 independent review be any more competent or careful on this analysis? How does that work?
Ms Evans : It is just adding an additional external view on our work.
Senator CAMERON: You are basically capitulating to the various interest groups.
Mr Quinlivan : I am not quite sure what you are suggesting. We did the work. We are confident that it is correct. It is in accordance with the cost recovery principles. We are also confident that the cost base is reasonable, although that will be subject to continuing scrutiny. The levy payers were interested in some additional assurance and they were prepared to pay for it.
Senator CAMERON: I get all of that.
Mr Quinlivan : So, I cannot see any reason why we would not have offered them that additional assurance.
Senator CAMERON: You got Finance to do the review. It was a proper process. They have signed off. Could you have done an independent review at the same time instead of dragging this out longer?
Mr Quinlivan : It has not dragged it out. The only delay that has occurred is this additional month for the adjustment to business systems that Mr Ryan was talking about. That is the only delay that has occurred here.
Senator CAMERON: Will live animal export fees be included in the independent review?
Ms Evans : No. The intent is not to do an independent review of that particular area.
Senator CAMERON: Why not?
Ms Evans : We did not need to in that particular area.
Senator CAMERON: When you say you did not need to—the industry did not say you should do it?
Ms Evans : Yes. The industry was satisfied with the work that we had done in that particular area.
Senator CAMERON: So, is this a new principle that will apply within the department for the future; that if you do any reviews of charges, if an individual group or an interest group says, 'We want an independent review', is this now a new principle that applies and will that principle apply more widely in government? Have you spoken to PMO about a wider application of this?
Mr Quinlivan : This is quite a specific context here, where we are providing a service which we are fully charging for and we are allocating the costs across the levy payers. In this case—and it will be the case with animal exports, too—those levy payers were interested in some additional assurance and were prepared to pay for it. If the review makes any findings about either the efficiency of the costs or some anomalies or improvements that could be made to the cost allocation methodology, we would be pleased to have that information and to act on it. I cannot see any reason why we would not have commissioned this work. We are going to do it for animal exports, meat exports and in other circumstances I think we would apply the same principles. Whether others in government would is a matter for them, but I cannot see any reason why we would not follow that practice.
Senator CAMERON: It just seemed to me to be very convoluted, and I am very concerned that the industry does not have confidence in a million dollars' worth of effort from the department. It is just bizarre. How many applications have been received for funding through the package Assisting Small Exporters?
Mr Read : There has been a range of applications received, and 31 announced by the minister. We mentioned earlier about taking those individual applications on notice and so we certainly will provide those to you.
Senator CAMERON: Has there been any change to the current guidelines?
Mr Read : No.
Senator CAMERON: How will projects be evaluated as successful?
Mr Read : As you would have seen in those program guidelines—or we can certainly provide them to you—they are quite detailed in assessment of performance against the objectives for each of those projects. We ensure clear objectives at the start. Again, some good performance criteria against that so that we can actually measure some decent outcomes at the end.
Senator CAMERON: How many applications did you receive for the first round of projects?
Mr Read : I think it was 60 or 70. It was 76.
Senator CAMERON: When will the second round application process commence?
Mr Read : At this stage we have not yet entered into the second round. We have the first round just announced now and those applicants are completing their obligations under each of those agreements that they need to work through. There is around $5 million that is currently still available in that program and we will be consulting with each of the commodity project managers around the most suitable approach to the next round.
Senator CAMERON: Thank you.
CHAIR: Senator Rhiannon.
Senator RHIANNON: Have you paid any external media consultants for training for staff in how to handle estimates?
Mr Quinlivan : Not to my knowledge and certainly not while I have been secretary. We will check whether there were any before that, but I would be surprised.
Senator RHIANNON: When you say 'to the best of my knowledge', do you mean prior to you coming into the job or to the best of your knowledge since you have been in the job?
Mr Quinlivan : No. Since I have been in the job I am very confident that we have not done that.
Senator RHIANNON: You have not?
Mr Quinlivan : Yes, but there may have been some in the past.
Senator RHIANNON: Is there anybody here? I just thought you might have come prepared for that answer as it has been in the news this week.
Mr Quinlivan : No. I have never heard any discussion about that kind of training in the department.
CHAIR: The difficulty for you in estimates for this committee is that we are very unpredictable and unconventional.
Senator RHIANNON: It still sounds like there is a lot of money being spent on it. It may be from other departments. Maybe this one does it themselves, which would be excellent.
On 24 September the department of agriculture was notified of ongoing ESCAS non-compliance in Kuwait with around 3,000 Australian sheep being sold from the Al Rai market. Despite this further evidence of non-compliance in Kuwait the department of agriculture has since granted two more export permits to exporters to send two further shipments into Kuwait. What additional conditions has the department now put on the two exporters to Kuwait and are these conditions different to any other additional conditions you have put on them previously?
Dr Clegg : There are two issues. We have reports of the non-compliance in Kuwait, so we need to investigate that, and then there is the repeated reports of non-compliance in Kuwait over Eid for the past three, four or five years. We have increased the risk rating of all of the Kuwait supply chains to high so that they are audited four times a year. We have asked the exporters to provide information about the animals that they had in the market at the time to do a complete reconciliation for us and to provide that information back at their earliest opportunity. We have given them some time frames for those responses, which are coming in, and then we will evaluate those. When we get those responses we will consider whether any additional conditions are needed.
At the moment, and this has been the case in the past Eid events, we have not been able to identify from which facilities the sheep are going missing. That is the dilemma that we are facing, so we will get this new information. We have asked for audits to be done—that will be done four times a year now instead of twice a year—and we will wait and see what the investigation brings.
Senator RHIANNON: So, we will wait to see what the investigation brings.
Dr Clegg : Yes.
Senator RHIANNON: I think that raises a question. Is an exporter's previous record of compliance with ESCAS taken into account prior to the granting of each export permit?
Dr Clegg : Yes.
Senator RHIANNON: So, it is taken into account?
Dr Clegg : Yes.
Senator RHIANNON: That means that you are then likely to change your position or you will just look at it and it is business as usual?
Dr Clegg : We evaluate the extent of the leakage and the circumstances that the sheep are going into in the supply chain. We recognise that Eid is an enormously high-risk period for sheep exports into the Middle East markets because there is a great desire of many in the public to buy their sheep and take their sheep home. In other times, outside of Eid, that is a much more reduced problem, so we take all of those factors into account.
Senator RHIANNON: I understand that this is the sixth such complaint in three years and you have just said in response to one of my questions that there is a high risk rating of all supply chains. The question then arises: what will it take to actually change your decisions in allowing these operations to continue?
Dr Clegg : Overall there is a very small number of sheep that are leaking out during Eid. When you look at the total number of sheep that are exported to Kuwait, for example, it takes close to 1 million sheep a year and we are talking about around 1,000 this time.
Senator RHIANNON: How many?
Dr Clegg : It is about 1,000 from the reports that I have here. Let me just check that for you.
Senator RHIANNON: While you are checking it, how can you be confident that it is 1,000 and that there is not more leakage of numbers that you just cannot assess?
Dr Clegg : What we have done is we have taken the highest number that is reported to us. In fact, I have here 2,000 animals for Kuwait. That is the biggest estimate that we have. That is the estimate that came from MLA, the estimate that came from Animals Australia and the estimate from one of the exporters. So, we take the highest number. It is a visual impression that those people have in the marketplace. They are talking about the number of sheep that they think are in the market at that time.
CHAIR: Can I take it that this would be people who are pinching to kill, to take it home to feed the mob?
Dr Clegg : Yes.
CHAIR: A lot of abattoirs have the same problem.
Dr Clegg : I am sure they do. The issue is that to date we have not been able to find out where the sheep are coming from. I do not think any of the people in the supply chains—
CHAIR: They are all likeable rogues in the bush. I presume they are the same over there.
Dr Clegg : They purchase them and I am sure they want to keep them for themselves to sell.
Senator RHIANNON: Are Australian sheep currently for sale in this market?
Dr Clegg : I cannot tell you exactly now. I cannot see that. I am not aware of that.
Senator RHIANNON: So, the ESCAS does not provide that information?
Dr Clegg : If you are asking whether there are sheep in the Al Rai market in Kuwait at this moment, I have no visibility of that. That is all I can say. I wait for reports that come to me from either MLA or from the exporters or from third parties. Is it possible that they could be there? Yes, it is.
Mr Quinlivan : Is it likely?
Dr Clegg : Is it likely? It is possible. I do not know how likely it is.
Senator RHIANNON: When will you find out? Again, just in understanding the process, is the process that you will get a report in a week's time or you will only get a report if somebody thinks that there are sheep there and they should report it? How tight is this process?
Dr Clegg : It relies on information that comes into us from exporters, from the animal welfare officers and the supply chain officers. They are reporting to us on a monthly basis. I do have to say that our reports from exporters have often said, 'Everything is fine. They're all good', and then I will get a report from the MLA or then I will get a report from Animals Australia.
Senator RHIANNON: That says otherwise?
Dr Clegg : Yes, that is right. It is the witness on the day.
Senator RHIANNON: So, there is an uncertainly in terms of the veracity of the data that you receive?
Dr Clegg : No, about how likely it is I will get a report. I think that is the issue. What I can say is that the majority of the sheep that are exported are staying in the ESCAS supply chain and that the standards in Kuwait have lifted as a result of ESCAS. Is it perfect? No, it is not. Will sheep get out? Yes.
CHAIR: No human endeavour is perfect.
Dr Clegg : Exactly. I think that is right, but it is making a big difference.
Senator RHIANNON: The department, I understand, was notified by export company Wellard Group of total non-compliance of the Emanuel supply chain during Eid al-Adha in Oman yet the department subsequently granted Emanuel Exports a further export permit into Oman for that same supply chain.
Dr Clegg : Yes, that is right.
Senator RHIANNON: Considering what appears to be the blatant and deliberate ESCAS breach notified to the department, how do we ascertain the appropriate level of assurance that ESCAS would be complied with regarding this subsequent shipment?
Dr Clegg : I think, again, it is about the time of year. Eid has passed. The shipment is going to Oman after Eid. What that has raised for us is the consideration of what exports we will be permitting to those supply chains before the next Eid. The high pressure period is for Eid. When we are getting closer to next year's Eid the question that will become pertinent for us is how many sheep should be going to the supply chain and what are the additional controls that these exporters have in place?
Senator RHIANNON: Are you saying that you allowed this subsequent shipment because it was not Eid?
Dr Clegg : Yes, because the pressure on that supply chain and the prior performance of that supply chain, outside of Eid, has not been—
Senator RHIANNON: So, within Eid have you ever stopped a shipment?
Dr Clegg : No, we have not at this point in time. That is the issue. This is the third time. We have applied all of these extra conditions. They are still leaking. The question for us is: should they be going? That is for next year.
Senator RHIANNON: The question for you is: what is your judgment at this time?
Dr Clegg : I am going to wait and see what happens because exporters are investigating it for me. I will see what extra conditions they had in place.
Senator RHIANNON: But considering the pressure only comes on when we arrive at Eid what further information could you possibly get that would assist you in this period to make a judgment that you have not made before?
Dr Clegg : I have examples of different exporters choosing not to export to Eid in markets where they have had major issues. We can take out facilities and supply chains where issues have been identified, so that is what we will do.
Senator RHIANNON: Thank you.
CHAIR: Of course the other thing is what you do not talk about, that is the facilitation requirements in some areas are a lot hotter than others. We are now going to compliance.
Ms Evans : If I may just very quickly say that when I responded to a question before about language training I may have given the impression that we do not provide any language training whatsoever. None of our counsellor positions have it as a requirement that they take language training but we do make it available if the person has the aptitude and so on to do it.
Senator BULLOCK: It is commonly known that I do not embrace new things well. I am a stick in the mud so I am going to stick with berries and just ask a few more questions about the perennial favourite. Going back a while there was a question on notice, question 90, in which I was asking if the import food notice had been in place whether we would not have had that hepatitis outbreak and you answered that it would not have made any different because you said, 'The likely cause being an isolated incident or temporary breakdown in the good agricultural practice or good hygienic practice.' So, I ask: what is the basis of your conclusion that there was an isolated incident or temporary breakdown rather than a systemic failure to maintain good agricultural and hygienic practice?
Mr Ironside : We work fairly closely with Patties Foods who are the importers of the berries during and after the incident associated with the hepatitis A outbreak and their own assessment of the incident is that, because of the relatively small number of persons who were affected by the disease from consumption of the berries, that the source of the infection was likely to have been a very limited event in one place at one time rather than something that was more systemic and continuing.
Senator BULLOCK: In accepting Patties' word for that have you asked them, if it was indeed just a temporary breakdown or something of that nature, what was the basis on which Patties made it their decision not to deal with those suppliers again?
Mr Ironside : The commercial decision that Patties made to not continue to use the two producers that were associated with the manufacturer of the products is a matter for them. I guess the reason that they decided to do that was primarily for commercial reasons but because they had seen that there was obviously some brand and reputation damage done to them by using those facilities and they chose to just sever that relationship on that basis.
Senator BULLOCK: As a financer, do you know or do you guess?
Mr Ironside : I am sorry?
Senator BULLOCK: Do you know or do you guess? You said 'I guess'.
Mr Ironside : I have worked with Patties Foods and they have shared some things with me but I am certainly not privy to all of the considerations that Patties—
Senator BULLOCK: To have come to that conclusion?
Mr Ironside : Yes.
Senator BULLOCK: How much faith do you put in the certificate? This is a certificate from one of the supplying companies that says that they comply with the global standards for food safety.
Mr Ironside : Yes.
Senator BULLOCK: Do you just say to yourself, 'They've got a certificate so they must be all right', or do you look behind that?
Mr Ironside : The certificate itself is just a representation of that company's compliance with a standard. There is a range of different standards that food manufacturers can sign up to. When you sign up to a reputable food standard, such as GFSI, you are subject to audit by a third party auditor who comes along and checks that you are doing the things that you say you will do to ensure that in food manufacturing you are adhering to things like good hygiene practices.
Senator BULLOCK: In a different context, the Chair has mentioned to me to my surprise and horror that sometimes in China these sorts of approvals are bought. Do you have any comment on that?
Mr Ironside : I could not say that never happens but I am confident that with the kinds of food standards of which you are speaking that the third party audits that are applied to check whether the standards are being adhered to are fairly rigorous and done by parties that might be more international in their operations rather than just being based in one country and thus subject to the kinds of influence that you are speaking about.
Senator BULLOCK: So, when this outbreak happened did that trigger some review of your own as to whether the certification procedures were being properly followed?
Mr Ironside : Certainly the incident itself has triggered a review of the way we manage food safety much more broadly than just looking at the certification arrangements. One of the things we are looking at very closely at the moment is how we transition the imported food inspection scheme from being primarily focused on inspection of food at the border to ensure that it complies with the food standards code to recognising—
Senator BULLOCK: Which is like throwing a dart at the dart board.
Mr Ironside : Well, in some circumstances it is not world's best practice in terms of detecting risks. In managing risks, like microbiological risks in some foods, you are certainly better off having an assurance that the food was produced and manufactured in a way that was safe rather than trying to pick it up at the border when it arrives. That is one aspect of the reform project that we have underway at the moment in looking at imported food.
Senator BULLOCK: If this were just an isolated incident and if the application of the imported food notice that comes through FSANZ would not fix it, what confidence can we have that these sorts of outbreaks will not recur?
Mr Ironside : The key change that was introduced by the imported food notice, as it related to berries, was the requirement for the importers to take responsibility to look at the supply chains that underpin their producers that they are buying from. What that does is it increases the level of assurance that we have about the safety of the food. It is not a complete assurance; it is not a no-risk situation but it improves the level of assurance that we have over what went before.
CHAIR: Just to put this into context, we did bring in 32 containers of dirt from China which was allegedly fertiliser that got to Condobolin and other places, so I hope we learnt some lessons from that. I mean obviously the facilitation fee was paid in that case.
Senator BULLOCK: It might have been very fertile dirt.
CHAIR: The poor bloke up at Condo, when he opened the container and thought he had bought this fertiliser at $200 a tonne off the market, and it was dirt, including seeds, grass and all sorts of contaminants.
Senator BULLOCK: Thank you for the fill-in. I always appreciate the Chair's assistance.
Senator CAMERON: Not like me at times.
Senator BULLOCK: Given the work that you have asked FSANZ to do and they have issued their notice and berries are now caught by that, very early on in my reading of this there is a range of foodstuffs that are susceptible to hepatitis carrying, so why have we not asked FSANZ to do the same things with those other foods such as semidried tomatoes, pomegranates and all the other stuff that carries these problems? Are we just responding to where we have a proven problem or do we say, 'This is a problem. It affects these sorts of things'? Why are we not on the front foot?
Mr Ironside : The question we asked FSANZ at the time was specific to berries because it was in response to a situation that had arisen and that we needed some technical advice on. Food Standards Australia and New Zealand constantly review the risks associated with a whole range of foods.
Senator BULLOCK: Food Standards Australia and New Zealand could not get out of their own way. Unless you ask them to do something they are not going to do it. You have asked with respect to one product that they institute a measure. There is a small list of other known products that are susceptible to this. Surely you should not just hang around waiting. You should go and say, 'We need to ensure that all of the things that are imported to Australia that are likely to be carrying hepatitis A are subject to appropriate safeguards.'
Mr Ironside : Yes. From the department's perspective what we have said to FSANZ is that in the reform work that we are doing at the moment, in terms of the change that I mentioned earlier which is moving away from a focus on at border inspection to one that focuses more on supply chain safety, the area that we think that that would be most applicable in is with foods that are minimally processed and therefore more susceptible to the microbiological contamination of the kind that you saw with berries, the hepatitis A and other bacterial contaminants.
Senator BULLOCK: Are you doing anything about other foodstuffs or not?
Mr Ironside : Yes.
Ms O'Connell : He said yes. We are looking at a broader range of foods that are susceptible to that and not just this.
CHAIR: Last question.
Senator WILLIAMS: Can I just ask one question.
Senator BULLOCK: I will get this one out of the way first.
Senator WILLIAMS: It is on the one that you just asked. In response to Senator Bullock's question you said that you had been working with FSANZ. What sort of response have you had from FSANZ about these suggestions?
Mr Ironside : FSANZ is quite supportive of the notion that the imported food inspection scheme should be moving towards a system that better recognises supply chain assurance rather than—
Senator WILLIAMS: If they are very supportive what action are they taking?
Mr Ironside : During the berries incident specifically they gave us advice about the appropriateness, for example, of E. coli testing as an indicator of processing hygiene and we have been working with them. As we develop some of the reform options that we will put to government, they have been commenting on those reform options and giving us advice about—
CHAIR: So, the E. coli test is not what you would call top?
Mr Ironside : It is an indicator of processing hygiene but it is not a—
CHAIR: It is a vagary.
Senator BULLOCK: This is my last question. I am often concerned with the frequency that there is recourse to commercial in confidence to fail to answer a question. I did ask a question about the address of Liaoning Ruili Food Co Ltd and the answer was, 'I can't tell you. It's commercial in confidence.' They have a website. They are open for business. They want to do business. This stuff is publicly available. Why on earth would you claim commercial in confidence over material that is readily available? It drives me, at least, up the wall.
CHAIR: Thank you. That was a comment.
Senator BULLOCK: No, it is a question. Why would they claim commercial in confidence on information like that?
Mr Ironside : I am sorry, I cannot remember if I said that in response to a question that you asked earlier. I am not sure. I just cannot recall. I will have to take that on notice and have a look.
Ms O'Connell : I would say that if the information was publicly available we should have referred you to the publicly available information.
CHAIR: That sounds good to me.
Senator CAMERON: Has the investigation into the biotech company Serana (WA) Pty Ltd now concluded?
Ms Vivian : I need to note that they are one of the companies being investigated and that broad investigation has not been completed.
Senator CAMERON: Let me ask you again. Has the investigation of Serana concluded?
Ms Vivian : The answer is that it has not. One thing that I would note, because we are often asked about the time frame for the investigation at this hearing, that just with some conversations with overseas agencies, including Interpol, there has been a similar case of what we are seeing with illegal international trading of bovine serum. The French are just bringing it to court now. It has taken eight years of investigation. So, the answer to your question is, no, it has not completed as yet.
Senator CAMERON: So, our international benchmark is the French and it is eight years, is it?
Ms Vivian : I am not saying it is a benchmark. I am just trying to give you an indication.
Senator CAMERON: What are you saying?
Ms Vivian : I am trying to give you an indication of the complexity of the nature of the investigations.
Senator CAMERON: So, you have had a look at the detail of the French case and you can tell me that it is similar to the Serana case and it could take years. Is that what you are saying?
Ms Vivian : I am not saying that this case will take eight years. I was just trying to give you an indication of the time frame. We started this investigation in 2013.
Senator CAMERON: That is not the least bit of help to me. I did not ask for that. That is not the least bit of help to me. So, what are the complications in the Serana case that it has not been finalised?
Ms Vivian : They are not complications. It is a complex criminal investigation. As I mentioned before, it is not just about Serana. There are a number of entities involved in this investigation. Since the last estimates—and maybe that would help if I gave you a bit of an idea of what we have done since then—we submitted a brief of evidence to the DPP on 9 April. Since last estimates we have executed a further two warrants and seized some further documents. We also became aware of the existence of quite a bit of other product which we have then since had tested. In terms of the product that was seized, it was purported to be from Australia and it is not from Australia. Also, the majority of the product appears, from the testing that we have done, to be from countries that are not free from foot-and-mouth disease.
Senator CAMERON: In those briefs of evidence were they for the purpose of prosecuting Serana?
Ms Vivian : The brief of evidence that we have does involve Serana. That is with the DPP. We are currently preparing another two briefs of evidence that we hope to have with the DPP by Christmas.
Senator CAMERON: Is there any ballpark figure? Are we in the French mode in terms of this Operation Fides?
Ms Vivian : The name of the operation is Operation Fides.
Senator CAMERON: Are you expecting that this could go on for years? Is that what you were trying to convey?
Ms Vivian : That is not my intention. I have made that clear. We are conscious of the impact that it has on the companies involved but, as I said, it is complex. It is also made longer by the level of assistance and support, in the way that the companies that are involved work with us. As I said, our intention is to have a further two briefs with the DPP by Christmas.
Senator CAMERON: Has the DPP recommended any prosecutions arising from your briefs of evidence?
Ms Vivian : We have lodged one brief with them and it has been allocated to an officer but we have not yet been formally advised about whether they are taking it forward or not.
Senator CAMERON: Now, in question on notice number 84 you provided a breakdown of costs from 13 May 2013 to 30 April 2015. It has been going two years already. That total cost was $566,909. Do you have any more detailed breakdowns on those costs?
Ms Vivian : On those costs or costs that have occurred since then?
Senator CAMERON: Well, since then and up to 1 May 2015? From 2015 to date?
Ms Vivian : Yes. That is what I have, the costs breakdown from 13 May 2013 to 30 September 2015, so if I go through those costings with you—
Senator CAMERON: Yes.
Ms Vivian : I will talk the total cost for the investigation.
Senator CAMERON: Yes.
Ms Vivian : We have spent around $20,581 on airfares; about $27,730 on accommodation; about $3,500 on car hire; around $2,000 on freight. There was a large cost, a legal cost, tied up with the court case in WA. That was $220,169. Interpretation costs have been $12,517. Testing costs, $14,873 and staff costs of $765,301 bring it to a total of $1,066,692.
Senator CAMERON: Has anyone done a cost-benefit analysis of this as to whether these costs should continue to be expended?
Ms Vivian : It is an investigation under review. We review this case regularly and make decisions about whether we have enough evidence and whether what we are finding is enough to take forward. I think we had a meeting on that probably about a week to two weeks ago and the answer is yes.
Senator CAMERON: So, you are going to continue?
Ms Vivian : Yes.
Senator CAMERON: With the potential to go down the French route, that could be eight years?
Ms Vivian : No. I was just trying to give the committee an example about the complexity of these cases and how long they can take when they are across several countries and when you talk about bovine serum, which is quite a complex sort of product.
Senator CAMERON: So, it is $1 million. How long have we been doing this? Is it since 2013?
Ms Vivian : It is 13 May 2013 when we commenced.
Senator CAMERON: So, we have been at it for two years. We have spent $1 million and there has not even been a prosecution.
Ms Vivian : As I said, we have briefs with it. Again, I raise with the committee, this is a very complex case. It is a case that goes to the heart of things like foot-and-mouth disease, which there have been estimates done in this country that if foot-and-mouth disease was to occur—
CHAIR: One billion—
Ms Vivian : I was going to say $50 billion over 10 years.
CHAIR: In the first year.
Ms Vivian : Yes, so it is not an investigation case that we take lightly.
Senator CAMERON: That is fine. I am trying to get to the bottom of $1 million worth of public expenditure here. Can you provide any further breakdown on those expenditures in terms of legal costs? Who has been engaged to do the legal work?
Ms Vivian : The legal work was completed. That was as a result of a challenge in terms of some warrants and some product that we seized in WA, so those legal costs relate to that issue, which I think was back in 2014.
Senator CAMERON: Is that part of CHECK AUDIO, 5:33:21 (same name again) Operation (indistinct)?
Ms Vivian : Yes.
Senator CAMERON: And that was not Serana?
Ms Vivian : That was actually related to a challenge about the product we seized by Serana.
Senator CAMERON: Do you have any further breakdown on the costs that you provided in your response to the question on notice number 84?
Ms O'Connell : Do you mean above the breakdown that Ms Vivian gave?
Senator CAMERON: Yes, things like travel, accommodation, a sum of money?
Mr Terpstra : The investigation involves three groups of different entities. Those investigations are spread across the country over a number of cities in Australia and, because of the unique expertise required and knowledge of the way that these matters have apparently been transacted, we need to keep a core group of investigators involved in those investigations as they take place.
Senator CAMERON: That is not what I have asked you.
Mr Terpstra : The reason why we have accommodation of that kind of magnitude is because we need to move staff around the country, so certainly it is possible to give a breakdown of the make-up of those costs but the issue is that the reason that they are being bunched up is because it is a large investigation and it certainly would not be helpful if we were to try and read through 50 or 100 lines of different costing information to the committee, so we have rolled it up over broad categories for information.
Senator CAMERON: So you made the decision that it would not be helpful?
Mr Terpstra : No. We have provided the information to you in a condensed format. If you require additional breakdown of that information, we can get that.
Senator CAMERON: If you can get it will you provide the detailed breakdowns of the $1 million? That is the whole box and dice with the cost of airlines, when people travelled, what class of travel and all of that.
Mr Terpstra : By way of the information to be broken down in that format I would suggest that that might also go to some of the investigation related information about where people were and what they were doing, which would not necessarily be in the interests of furthering the investigation without—
Senator CAMERON: That may be your view but it is not my view about where people travelled to and when they travelled. I am not asking what they were doing. Nobody asked for that. You have put that in. That is not the question.
Mr Quinlivan : We will look at what we can reasonably provide you on this question. We can see what you are after and we will do our best to—
Senator CAMERON: And I can see what Mr Terpstra is doing. I do not want to get played like this in terms of putting your own interpretation on my questions. It is a simple question and you should simply answer the questions. Do not interpret them in a way that you can avoid proper scrutiny.
CHAIR: Thank you very much. Can I just intervene and say if there is a covert operation—and I do not know whether there is or not—but if you are investigating someone you do not want them to know that you have peeping through their window, as it were, if it is undercover, if you are doing some sort of an undercover operation.
Mr Terpstra : That goes to my point.
CHAIR: So, if it can be done without disclosing the operation I guess that is all right. I still go back to—and Senator Sterle you will remember this—the mandarin business in Queensland where we gave notice to them that we were coming in two weeks time to examine for the citrus canker outbreak and, of course, they got rid of everything and so on. That makes the point. You cannot actually give the enemy notice.
Senator BULLOCK: I presume that not all of the $1 million was spent on covert operations, so perhaps there could be a little column that says 'covert operations' and we could deal with that.
Mr Terpstra : What I have said is we would look to provide what information we reasonably can.
Senator CAMERON: Can I just indicate, Secretary, that if you do put in covert operations I will be asking questions in terms of these covert operations.
Mr Quinlivan : Well, there may be that issue. There may also be the level of resources that are required to provide the kind of detail that you have asked as well, which I think is also a pertinent consideration, but we will do our best to provide—
Senator CAMERON: If I can remind you, Secretary, that you have got a responsibility to account for public expenditure.
Mr Quinlivan : Indeed.
Senator CAMERON: And if you need a bookkeeper to sit down and go through this in great detail then that is what you do. That is why you are here and that is what the Senate expects. If you are now pre-empting that this is too hard then I will look very carefully at the excuses that you provide.
Mr Quinlivan : I am not suggesting that at all.
CHAIR: We are not suggesting for a moment, Secretary, that you have spent $30,000 on your credit card, as one other secretary did down here at the Ottoman on lunches. I mean there has got to be a sense of reasonableness in this.
Senator CAMERON: Yes. Let us see what we get back and I will make the judgment from my point of view as to whether it is reasonable and whether we need to pursue it further.
Ms Vivian : Without prolonging this, I just want to check. I have just found question on notice number 84. Were you asking for those total costs to be described in similar terms to what we provided?
Senator CAMERON: Yes.
Ms Vivian : We can get that for you.
Senator BULLOCK: I thought that Senator Cameron was asking for more detail.
Senator CAMERON: I asked for them all but you can provide that. If you can provide it for that period there is no reason why you cannot provide it for the full period, for the full $1 million dollars. That is fine. I am asking for the whole $1.066 million. I would like a breakdown on that.
CHAIR: Without jeopardising the operation.
Senator CAMERON: I am asking for a breakdown. You can put in what you like, Chair. I am asking the question and I will make a judgment on the answers that come back.
CHAIR: Sadly for you I am chairing the meeting.
Ms Vivian : I would state that what we have provided to you in question on notice 84 can be done for the full costings.
Senator CAMERON: I just want to make sure that it is not just for that period. I think Mr Quinlivan has said he will provide details if it is reasonably possible across the whole $1.066 million.
Ms Vivian : Yes. That is what I was referring to.
Senator CAMERON: I do not want any confusion. Now, have there been any changes in how you investigate? What lessons have you learned from this investigation?
Ms Vivian : We would do a review of that once the investigation was complete so, again, I need to note this is an investigation that is underway. In terms of lessons learned, one of the things we do at our two- or three-weekly review of the case is look at what the next steps will be. That involves working with other agencies in this process and overseas jurisdictions as well, and that leads to some complexity, so each time we are reviewing the most sensible next steps that we can take.
CHAIR: Can I just seek a clarification. Senator Williams, did you say you had a question?
Senator WILLIAMS: No, I did not.
Senator CAMERON: Can I move to the issue of the export of greyhounds. Who handles that?
Mr Quinlivan : The party that deals with that may have decamped.
Ms O'Connell : Yes.
Senator CAMERON: Is it in this area?
Mr Quinlivan : No, exports.
Ms O'Connell : Exports. We dealt with that division earlier.
Senator CAMERON: I am sorry about that. I see Ms Evans running up and ready to do what she can. I am sorry I did not get the appropriate officer but I am sure Ms Evans will do what she can here and we may have to get the officer back in February or do some questions on notice.
Mr Quinlivan : Hopefully this problem will not arise next time because we will have the appropriate people for a suite of subject areas.
Senator CAMERON: I think that would be great. Are you aware of the passport system that has been put together by the industry itself?
Ms Evans : Yes, we are aware of the passport system.
Senator CAMERON: Are you also aware that if a breeder is not part of the industry association, the peak body, they are not covered by this passport system?
Ms Evans : I am not aware of those details but if I may elaborate on the department's role with respect to the passport system?
Senator CAMERON: Yes.
Ms Evans : Our role is limited under the Export Control Animals Order to issuing export permits and health certificates for dogs to ensure that the animal meets importing country requirements. The greyhound passport system is something that Greyhounds Australasia runs and is not part of our export certification requirements.
Senator CAMERON: Do you know how many greyhounds have been exported and where they have gone to?
Ms Evans : Yes. Do you want me to read them out?
Senator CAMERON: Yes.
Ms Evans : In 2015 we have sent one greyhound to Austria, six to Canada, 59 to China, one to the Czech Republic, three to Germany, 98 to Hong Kong, three to Ireland, two to Japan, 370 to Macau, one to the Netherlands, 448 to New Zealand, one to Pakistan, four to Singapore, one to Slovakia, four to South Korea, one to Spain, two to Sweden, 12 to Taiwan, one to Thailand, eight to the United Arab Emirates, 17 to the UK and 10 to the United States, so that is a total of 1,053 in 2015.
CHAIR: That is dogs, is it?
Ms Evans : Yes.
CHAIR: What breed?
Senator CAMERON: Greyhounds.
Ms Evans : Yes, that is correct. That is greyhound exports by destination.
CHAIR: Is that for exercise and not human consumption?
Ms Evans : I am not going to comment on that. We simply certify the dogs meet the importing country requirements and provide a health certificate.
CHAIR: I saw a trailer load of dogs and foxes in China and I asked them what they were. They said, 'They're going to the market to be eaten.'
Senator WILLIAMS: That would not happen, would it?
CHAIR: Have you not heard of that?
Senator CAMERON: Ms Evans, are you aware of how many of those exports use the passport system?
Ms Evans : I am not and the department will not collect that information.
Senator CAMERON: Is there a passport number on the greyhound export declaration?
Ms Evans : I would have to take that on notice.
Senator CAMERON: I can tell you there is. If that is the case, would you be able to then determine how many have been exported using the passport system?
Ms Evans : Again, I would have to take that on notice. I do not know what mechanisms we have got to search across it, but if it is there and if we can then we will provide it on notice.
Senator CAMERON: So, could you provide the details of that on notice?
Ms Evans : Yes.
Senator CAMERON: Have you had any discussions about making the passport system mandatory?
Ms Evans : Not to my knowledge.
Senator CAMERON: Have you been asked for any briefs on this issue?
Ms Evans : The declaration form was developed by the greyhound industry. It has never been an official government requirement and we do not require it as a declaration to issue out permits, so I have not sought any briefing on it.
Senator CAMERON: Are you aware that there is support in the industry for a mandatory passport system funded by an industry levy?
Ms Evans : I am not personally. I would need to check with Mr Read as to whether he is aware of any approaches along those lines.
Senator CAMERON: I think this industry is in a lot of trouble and the more regulation and support it can get the better. I am finished in this area.
CHAIR: We will move to biosecurity.
Senator CAMERON: What are the differences in the way the Eminent Scientists Group currently works compared to the proposed scientific advisory group?
Mr Koval : This is in respect of the new biosecurity broad risk assessment guidelines with the implementation of the new act?
Senator CAMERON: Yes. Are there new draft guidelines?
Mr Koval : That is correct. The regulations and the guidelines are out for consultation at the moment to 16 December this year.
Senator CAMERON: So, there are the guidelines. Has the new scientific advisory group been established?
Mr Koval : No.
Senator CAMERON: Has the department drafted any changes to the way the Eminent Scientists Group and the new group would work?
Ms Langford : It is the intention that the Eminent Scientists Group will wind up with the current import risk analysis process and that the scientific advisory group will be the new scientific advisers for the new process for the biosecurity import risk analysis under the Biosecurity Act.
Senator CAMERON: Any proposed changes?
Ms Langford : Yes. They are just proposed. They are out for consultation and we do expect more detail to come through as well. For instance, at the moment, the Eminent Scientists Group are only engaged as part of an expanded IRA process so under current law there are two types of regulated import risk analysis; one goes for 24 months and one goes for 36 months. The key difference in the two is the engagement of the Eminent Scientists Group at the end of the process to review submissions made and whether they have been addressed.
In early consultations, a few years ago, in relation to the then Biosecurity Bill 2012 and then through the import risk analysis examination, what was found was that people wanted to see more regular involvement of independent scientists in the process, so at the moment we are looking at establishing a group at the start of an IRA process which will be involved at points throughout to provide advice on specific issues as it goes. Now, beyond that the detail of when, why, how and who is still being worked through with stakeholders and it may also differ, depending on what subject matter is being considered by each import risk analysis process.
Senator CAMERON: Is there continuing work on the review of Australia's import risk analysis?
Ms Langford : This forms it.
Senator CAMERON: This is part of it?
Ms Langford : Yes.
Senator CAMERON: What other areas are under consideration?
Ms Langford : As part of an election commitment we have gone away and had a look at the import risk analysis process. That has resulted in a few things. Firstly, it resulted in the provisions that are now in the Biosecurity Act 2015. Some of the views of stakeholders through that process have also ended up reflected in the draft Biosecurity Import Risk Analysis regulations which are out for consultation and then some others are within the guidelines. Key themes that came through the consultations which are being built in are around the engagement of external scientists but also our internal scientists in getting a clearer view for stakeholders of the kinds of expertise that the department has and also that it accesses. It is really then around consultation and letting affected industries know, understand and participate in the process where it is appropriate to do so.
Senator CAMERON: So, what concerns have been raised about the new scientific advisory model?
Ms Langford : I have not heard direct concerns in relation to it. People are wanting more detail and that is fair. We did not put a lot of detail in the guidelines because we wanted to have more conversations with them. From what I have heard personally, people are quite excited by the idea of having a group involved throughout the process rather than just coming in to rubber stamp at the end. They are their words, not mine.
They are quite keen on the ideas, for instance, of industry being able to put forward ideas for membership. But the thing that industry is really excited about with the new process is the establishment of a biosecurity liaison officer, somebody in the department who will be dedicated to working with affected industry throughout the process to explain it to them and to take them through what it means and what they can expect and when. That is something they felt could be a black hole, like when an IRA starts and they do not know when the next thing will come. So, they are really quite keen on the establishment of a liaison officer who can explain the process, help explain the science, make sure they get access to the scientists to explain things in more detail if needed and so on.
Senator CAMERON: What is the acronym for the Biosecurity Risk Impact Assessment? Is it BRIA?
Ms Langford : BRIA.
Senator CAMERON: When do you expect to finalise the BRIA guidelines?
Mr Koval : They are out for consultation until 16 December and, depending on how many comments we get, for us to consider them and take them into account in finalising the guidelines and the regulations, so we would anticipate early in the new year.
Senator CAMERON: So, finalising early in the new year?
Mr Koval : Yes.
Senator CAMERON: In the exposure draft section 14, item 14 had a clause about termination of a BRIA. How will this work in practical terms and what is the rational for terminating a BRIA before it has completed its work?
Ms Langford : There are a couple of situations where the termination of a BRIA might occur, like now with an IRA process as well. One is that we just cannot get the information that we need to complete it and I think that is reflected in those provisions. There is also in relation to if the person asking for it to be done, the proposer, withdraws that proposal, so a trading partner or a company no longer wishes to seek access to the market, but largely it is in the provisions that you will see. It is in relation to us going to the scientific advisory group asking for information that they cannot provide at this point or the director otherwise trying to source information and not being able to get access to it. Other information beyond the science might include things like information on production systems overseas.
Senator CAMERON: Section 15, item 16, talks about an import permit application not affected by a BRIA. It says, basically, that the class of goods does not prevent a decision in relation to an application for a permit authorising, for the purpose of the act, a person to import the goods or class of goods and then it goes on. Can you provide clarification of how this measure will work in practical terms?
Ms Langford : All it is really describing is the fact that even though a BRIA process might be underway an import permit application still needs to be looked at, assessed and determined whether it is going to be granted or not. Now, obviously if there are unknown conditions then that decision maker will have to consider that in determining whether to grant a permit or not, but we cannot not assess it and not give clarity to the person seeking to bring it in.
Senator CAMERON: So, could that leave Australia exposed to further disease if the BRIA deems the goods to be high risk?
Ms Langford : Regulation 16 is an administrative process. Now, if the assessor of the permit were to determine that something was allowed to come in, if they felt that the risks were not unacceptable and they were later held to be unacceptable, then we would have to manage that like we do when there are changes to risks offshore or to things coming in. So I cannot say, no, it would never result in a higher level of risk but we have mechanisms and we deal with those kinds of things on a day-to-day basis within the biosecurity system.
Senator CAMERON: So, you need to make value judgments on these things?
Ms Langford : Decision makers have to make the call with the information available to them.
Senator CAMERON: Yes. Is that value judgment or a scientific judgment?
Ms Langford : Science is an input into that decision and then other administrative law decision making concepts have to be built in as well. The science is a key driver of all the decisions that our officers make.
Senator CAMERON: So, science and administrative law. They are the two factors. Are there any other factors?
Ms Langford : It is information available to them. Under administrative law there is guidance to administrative decision makers. I am not a practising lawyer so there is only so much I can run you through with that but reasonableness and concepts like that always come into play.
Senator CAMERON: We have got a thing called an ALOP; is that right? That is Australia's appropriate level of protection.
Ms Langford : Yes.
Senator CAMERON: It talks about reducing risk to a very low level but not to zero. Are there any diseases with a rating of zero risk?
Mr Koval : Not to my knowledge but we can have a look and see. We are not the scientists.
Senator CAMERON: What about foot-and-mouth disease? Would that be a zero risk?
Ms Langford : The measures are applied to manage the risk to a level and the scientists are the ones who determine what measures would need to be applied to manage the risk of something coming in. Now, we do that and then we reflect that within our legal framework, so right now products that could bring in foot-and-mouth disease are prohibited or have measures applied to the point where it is not a risk. That is where the science underpins all of our decision making under the legislation.
Senator CAMERON: When it says 'but not to zero' does that mean that there still could be—
Mr Quinlivan : That is a different concept. I think what that is expressing is that trading activity carries inherent risks which it is impossible to entirely eliminate or mitigate, so what Australia is saying in setting its appropriate level of protection in that way is that we are a trading country that expects to be importing and exporting and, therefore, it carries risks, but we will only accept those risks to a low level. I do not think it relates to any particular disease. It is about, if you like, a policy posture or a philosophy that we apply across the board to all of our import and trading activity.
Senator CAMERON: Are there any current BRIAs underway with products coming into Australia following the new free trade agreements?
Mr Koval : I am sorry, I missed the first part of that question.
Senator CAMERON: Are there any current BRIAs underway with products coming into Australia following the new free trade agreements?
Ms Langford : The new process will not commence until the biosecurity act commences next year, so no.
Ms O'Connell : All of these measures come into place on 16 June 2016, which is when the new legislation comes into effect, so the consultation processes that we outlined, they are with 16 June 2016 in mind.
Senator CAMERON: So, it is the old system?
Ms O'Connell : It is the old system that we are currently operating under the existing Quarantine Act of 1908. We are still operating under that until 16 June 2016, when the new biosecurity act comes into force.
Senator CAMERON: Have any of the new free trade agreements triggered the importation of fresh meat of bovine genetic material?
Ms O'Connell : I would have to take that on notice.
Mr Quinlivan : Have any agreements triggered trade?
Senator CAMERON: Triggered trade in bovine genetic material or fresh meat?
Ms O'Connell : I would have to take that on notice. I think that is the export area again.
Ms Evans : It is about free trade agreements so I am afraid I would have to say that we will take it on notice as well. All we could answer is whether or not any of the free trade agreements had a tariff or a quota change that was relevant for those products and then, if there was a commercial reason, that would have affected the trade at that point but none of the free trade agreements have affected the scientific approach we take for setting the standards for import.
Senator CAMERON: That is fine but I would have thought the department would have been monitoring if there were new markets in these areas, bovine genetic material or fresh meat. Do you know?
Ms Evans : For exports or for imports?
Senator CAMERON: For imports.
Ms Evans : For imports.
Senator CAMERON: Yes.
Ms Evans : We would be able to do some statistics on whether those things have come in. China, for example, has not yet come into force, so it is not going to have any direct impact on that.
Senator CAMERON: So you are confident, if there is a new market, that you will be able to handle that effectively to reduce any threat?
Ms O'Connell : We still need to look at the import risk assessment, notwithstanding the agreement signed. We still have to evaluate it.
Mr Koval : The free trade agreements have no impact on our level of SPS arrangements.
Senator CAMERON: Have you done any analysis as to whether you will require more oversight in relation to these free trade agreements? Do you need any more resources?
Mr Quinlivan : No. This is the conversation that we were having right at the start today where we were saying that the free trade agreements do not affect our risk protection measures and, therefore, we have not commenced any IRAs on new material since then and so forth. The issue has not arisen yet. If it arises in future we will treat it on its merits in accordance with our law, but it is not related to the free trade agreements.
CHAIR: It is a precaution. Having been here for a long time and watched all of this, there are some countries that would like to import meat into our country to lower our standard which is the highest in the world for clean, green and free and while ever I am alive it is not going to happen.
Ms Evans : If I could go back to the senator's question, there is a volume issue, so if the free trade agreements have created opportunities for more commercial trade to happen with Australia then our resourcing will adjust to make sure that we are able to do the appropriate risk checking consistent with the same framework that we have always applied, and there is a cost recovery framework in place, so it is flexible.
Senator CAMERON: I understand that. So, given the econometric modelling and all of the arguments or the promises of increased trade, have you done any work within the department to manage your capacity to handle increased volume?
Ms Evans : We are confident that we can handle any increased volume of imports coming into the country.
Senator CAMERON: Any volume?
Ms Evans : Any likely volume.
Senator CAMERON: And what is that likely volume?
Ms Evans : I would have to take that on notice. I think, generally speaking, on the kinds of products you have been talking about, the projected amounts are generally small, but I will take it on notice.
Senator CAMERON: What about export? Are there any implications for resources on exports?
Ms Evans : Yes, there are, because as we increase the opportunities for export markets, our role is to make sure that we have certified that those products meet the other country's requirements. If there is an increased amount of exports we will be doing an increased amount of certification work and our workforce and so on will expand appropriately to be able to do that at the same standards as we have always done and with the same levels of assurance. Again, because we operate with that cost-recovery model, we have the flexibility to do that so we are able to put the resourcing there to provide that assurance when we need it.
CHAIR: That begs the question. If a sovereign investor comes into Australia and happens to buy say Kidman & Co, which was on the cards, and that, as you would be aware, the tax laws are out of date because they do not actually deal with sovereign investment—I mean a sovereign investor coming into Australia can declare his production so it could be the cattle off the Kidman Station for a humanitarian purpose in the land of origin—how would we deal with that when we are dealing with a sovereign, off-the-market process? How would you know what you were dealing with? Now, you probably do not know the answer to that because we have not dealt with it, but you would be aware that under the present convention for tax purposes that a foreign sovereign investor coming into Australia such as the mob, and I will not go into details.
Ms Evans : I cannot comment on the tax arrangements.
CHAIR: No, but they have a passive investor so a government lends you the money to do the work for them. They do not pay tax on the interest you pay them but you get a tax deduction here and if they declare that the production is for humanitarian purposes and it does not go through the market, which distorts the market, they do not pay any tax on the export of that because they have got charity status under the present law. It is really crazy. What would be the arrangements around total vertical integration of their exports?
Mr Quinlivan : Our role is to certify the exports in accordance with the food and safety requirements of the importing country regardless of the commercial arrangements.
CHAIR: So, if it is the importing country that is actually importing their own meat from Australia how would you deal with that?
Mr Quinlivan : It would be an Australian export to that country.
CHAIR: They might just say, 'She'll be right.'
Mr Quinlivan : Well, we know what their requirements are.
CHAIR: But would they have the capacity to wave it through because they are the receiver?
Mr Quinlivan : No, and we would not have the capacity to provide special treatment for product from any particular company, because it is an Australian export; it is not an export from an individual particular company. We do not have regard to the commercial arrangements.
CHAIR: I am talking about sovereign both ways.
Mr Quinlivan : I do not see how—
CHAIR: You do not see it because the law has never had to deal with it. It is what I call the redefinition of sovereignty. A sovereign entity foreign comes over here and buys some of our sovereign asset. Under the present international conventions, if they declare the production for humanitarian purpose, that is the sovereign person buying our sovereignty and then producing, they do not participate in our revenue base and I want to know how, given they set the rules for their own importation, they would be affected in terms of the quality of the product. They could, if they wanted to, just say, 'Send it, mate. It'll be right', and that could damage us internationally if something went extremely bad in what they are sending back.
Ms Evans : All agricultural export product is subject to the same regulation, irrespective of the ownership.
CHAIR: But subject to them receiving it on their rules.
Ms Evans : It is all consistent. We apply the same rules to all produce. There are no exceptions.
CHAIR: You apply the rules coming in. Going out do we have to comply with their rules?
Ms O'Connell : That is right through a certification process which is the same certification—
CHAIR: And their rules can vary.
Ms O'Connell : Only by commodity, not by owner.
CHAIR: That is correct and so if they decide to lower the barrier because they want whatever, they can do that.
Ms O'Connell : That would hold for all exports of that commodity from this country.
CHAIR: Yes, but it is one thing we need to think about as a the government. Back to you, Senator Cameron.
Senator CAMERON: So, in relation to fresh meat has there been any importation of fresh meat from Japan?
Ms Evans : No.
Senator CAMERON: When will the department release the subordinate legislation relating to the Biosecurity Act 2015?
Mr Koval : We released the first part of that, which is the BRIA regulation that we were talking about earlier, and we have another series of draft regulations that we will be releasing hopefully over the coming months—in the next month to six weeks.
Ms O'Connell : Those are out for consultation. Then there will be a process after that of taking note of the concerns and issues raised and then releasing the final regulations.
Senator CAMERON: When does that consultation finish?
Ms O'Connell : It is later this month for the impact risk assessments that Mr Koval was talking about.
Mr Koval : It is 16 December. When we release the new ones will be a period of time after that and that would depend on the date we release them.
Senator CAMERON: Where does finalising these regulations fit in terms of the department's legislative priorities?
Mr Koval : It is very high on our priority.
Senator CAMERON: High?
Ms Evans : Yes.
Senator CAMERON: Can you provide an update on the IRA of freshwater ornamental fin fish from approved countries?
Mr Koval : While I look after the biosecurity policy, that is managed through our animal division who are doing the assessment. I will have to take that on notice and get the advice from them.
Ms O'Connell : It was not flagged that we needed them here today, otherwise they would have been here.
Senator CAMERON: So, why did the department change its initial advice that new measures would commence from 1 March 2015 and now advise that it will be revised to March 2016?
Mr Quinlivan : Measures relating to?
Senator CAMERON: The measures relating to the IRA.
Mr Quinlivan : I think that is the same question you were asking. You might recall earlier on that we asked, because the committee had not identified the animal and plant areas for questions, so that is a question for the animal group.
Senator CAMERON: That is good. I am finished.
CHAIR: We will now go to Sustainable Agriculture and Fisheries Division.
Senator CAMERON: Secretary, with the challenges of climate change what work is the department currently undertaking to deal with the long-term issues that will benefit the sustainability of agriculture?
Mr Quinlivan : We spent a little time talking about this issue when we last met and I indicated then that we had quite an extensive program of work; in fact, a lot of our programs and a lot of our policy work could be characterised as adaptation to climate change. It was a theme and a stream of logic that was present in perhaps not all but a very large amount of the department's work, including in the biosecurity space, where we are actively monitoring the increase in the ranges of various pests and diseases, so I would say that it is an issue that infuses our work generally.
Senator CAMERON: It infuses your work generally?
Mr Quinlivan : Yes.
Senator CAMERON: It is a theme and it is a stream of logic?
Mr Quinlivan : Yes.
Senator CAMERON: How does this theme and stream of logic materialise in resources in the department?
Mr Quinlivan : In the resources in the department?
Senator CAMERON: Yes.
Mr Quinlivan : All of the relevant areas in the department would be expected to be taking those kind of issues into account in their work. That is their role professionally. I mentioned a good example just a moment ago of people in the biosecurity space who need to have contemporary knowledge of the existing and changing ranges of pests and diseases and taking that into account in decisions made across all the sorts of things we have been talking about earlier this afternoon. That is something that is just a standard part of their work and we would expect them to do that. It is not so much a matter of having dedicated resources dealing with the issue as all of the relevant areas of the department taking it into account in their work.
Senator CAMERON: So, you do not have any specialists dealing with the issue of climate change in the agriculture department?
Mr Quinlivan : We have a small number of people whose job it is to be involved in whole-of-government policy development in the area, but that is a small unit. The bigger resource effort throughout the department is those people who take it into account in their work generally.
Senator CAMERON: So they take it into account in their work generally?
Mr Quinlivan : Yes.
Senator CAMERON: How many of these specialists do you have?
Mr Quinlivan : It is a small number. We will have to take on notice the precise number.
Senator CAMERON: So small you cannot remember?
Mr Quinlivan : I am not sure. It is an important group, that is for sure.
Senator CAMERON: It is an important group?
Mr Quinlivan : Yes.
Senator CAMERON: Have the numbers in that group declined over the last two years?
Mr Quinlivan : I would say they have probably increased over the last two years.
CHAIR: Can I just seek clarification. We are talking about a group of people in the department whose role is to do what?
Mr Quinlivan : Contribute to whole-of-government advising and decision making on climate change and to be monitoring climate change policy developments domestically and internationally as they relate to agricultural land use.
CHAIR: A picture paints a thousand words.
Mr Quinlivan : I have just described their function.
CHAIR: Yes, I know, which does not mean anything at all to me. The average cocky is very alert to climate change and we have completely altered farming methods without having someone from the department come and ram it down our neck. I mean there is no such thing as ploughing. You do not have annual pastures anymore if you have got any brains; that is, event based pastures and all of that stuff. So, what would the role of these few people that are in the department be?
Senator CAMERON: That was my next question.
Mr Quinlivan : I just described their role. It is to contribute to domestic policy making in the agriculture and land use sector and more generally, and to monitor international developments.
CHAIR: But where do they fit into the current farming practices? I mean most of the district agronomists are privatised. We have a whole lot of stuff going on in the bush. Where do these people fit in? Do they say rainfall is going to decline, allegedly—you have heard me say this to you and you are probably sick of hearing it—by 15 per cent in the southern basin and 35 per cent decline in runoff? Why do we still grow paddy rice? I do not know. You do not need the paddy anymore. Where do these guys fit in? Are they actual agronomists or are they paper writers? Is it a theory on paper? Do they all have PhDs which gather dust on a shelf somewhere or are they practical?
Mr Quinlivan : This department does not provide agronomic advice, although as you know, a lot of the work done by the R&D corporations in the portfolio is directed towards better agronomic practices and knowledge, but that is not a function of this department.
CHAIR: Without too much cover around it, what do they actually do, so I can touch and feel what they do?
Mr Quinlivan : Policy work.
CHAIR: Can you give me an example of policy work.
Mr Quinlivan : I might ask Mr Glyde to talk about the department's contribution to the government's direct action policy, but its land use components would be an obvious area of focus.
Mr Glyde : Generally speaking, it is contributing to the police development that the government has in relation to this. It is working on programs. It is administering—
CHAIR: Can you give me one program so I can get it in my head? Can I just advise you, if you do not already know, that a lot of stuff that is going on out there now is a con job. I mean I know neighbours of mine who go and buy the roughest country at the back of somewhere, lock it up and get this unbelievable credit. They eat the guts out of it for six months, lock it up for the next six months and get $150,000 for nothing, allegedly because of their carbon and whatever. It is absolute nonsense. Do tell me a program.
Ms Lauder : Under the Carbon Farming Futures program there is a research component. Some of the projects that have been funded to do research include looking at critical climate change tipping points for the fruit tree industry; resilience to heat and drought stress under elevated carbon dioxide conditions in sugar cane, cereal, pulse and oil seed crops and farm management options; and, improved heat stress resilience in the dairy industry. They are just a couple of examples.
CHAIR: What, putting a shade cloth over the dairy herd?
Ms Lauder : I am sorry?
CHAIR: Putting a shade over the cows. If you have got half a brain and you are a farmer, if you have not got any trees you would put up a shade cloth, but anyhow we will forget it.
Ms Lauder : We were asked that question on notice just recently so one of the answers coming back to you will be detailing these programs and the projects that are—
CHAIR: You can have too much theory and not enough dirt under your fingernails in this stuff. Back to you.
Senator CAMERON: What are the classifications for these specialists? How are they described? Is there a unit? Is there a name for the unit?
Mr Glyde : The unit that we are talking about actually belongs in another division that has already appeared. Off the top of my head I do not remember the name of the particular section, with the specialists, the policy advisers, that the secretary was talking about. I am more than happy to provide that on notice, as we have already done in terms of the numbers of people.
Senator CAMERON: Yes, just so that we know, so in future we can say it is the Climate Change Unit or whatever it is called and we will know how many people are in it. We will know what programs they are involved in.
CHAIR: Perhaps we could even meet them and have a meeting.
Senator CAMERON: Yes, I am happy for that.
CHAIR: That would be the best way.
Mr Glyde : Yes, I am happy to do that.
Senator CAMERON: Has this unit, this group of specialists, prepared any papers on climate change?
Mr Glyde : As the secretary said, over the course of the time they have been in existence, they would have prepared a lot of papers. Perhaps this is the chair's problem. In terms of providing advice to inform broader policy development across the government they would have prepared lots of papers for both internal and external consumption.
Senator CAMERON: I am sure you will claim that those papers are government advice, but can you provide the number of papers and the names of the papers that have been done in the last two years?
Mr Quinlivan : We will see what we can do. A lot of them would be cabinet related but we will see what we can do.
Senator CAMERON: Are you saying that there is a problem in telling me the number of papers?
Mr Quinlivan : I am just not sure how we would define papers and how they are recorded but, for instance, there has obviously been a big program of work going on within the government recently to develop a position for the Paris conference and so we have been contributing quite a lot of material to that.
CHAIR: You have probably got me going, Senator Cameron, and I apologise but I have never gotten over, and this was the theory that if someone had gathered a PhD, dust covered somewhere, that we, in this committee—and Senator Sterle will remember this, and there was going to be an inquiry into it but I have no idea at all but we will get back to it—but outside Bathurst there was a woman who worked in the lands section of the New South Wales government who got in touch with a cocky between Bathurst and Mudgee and said, 'Do you mind if I buy your property?', and she did. She paid $240,000 or $280,000 for it. Ten days after she signed the contract she actually got a grant for $850,000 for a property for which she paid $200,000-odd, to lock part of it up under the gummy grass whatever.
She then went to the bank to get a loan and the bank sent a valuer out there. Do you know what they valued the place at? It was minus $400,000 because there were that many blackberries and noxious weeds on the property that would take a lot of money to bring it back so it was within reason for the Rural Lands Protection Board and the Catchment Management Authority. I actually rang the Catchment Management Authority bloke that did all of this. It was a complete con and if that is what this section in the government, if that is the best that they can come up with for carbon credit savings, it is as bad as the Nimmie-Caira buyback down in the Lower Bidgee. I would be very interested to meet these people. The woman who worked internally paid $200,000-odd for the property. Ten days, because she applied for the grant before she completed the deal—
Senator CAMERON: I am sure that you have asked questions on this at least 12 months ago.
CHAIR: I have.
Mr Quinlivan : We would be happy to organise and provide a briefing.
CHAIR: We have not received the answers back. They were going to have an audit officer or someone. It is an $850,000 grant to lock up a piece of property that the person paid $200,000-odd for. That was under an official government environmental whatever; Watch the Wallabies or whatever. Back to you.
Senator CAMERON: Can you provide, on notice, the specific measures and projects that the department is working on to address the management of our natural resources? Can you give us an overview of what projects have been done?
Ms Lauder : We can, indeed. Through the National Landcare program we are delivering a number of projects. The majority of the funding from this department for that program is going to the 56 regional natural resource management bodies. All of the projects and the activities that we are funding them to do are on the web. We require them to provide updates regularly on the nrm.gov.au website. I do not have a list with me but there is substantial funding there. In fact, we have met with the CEOs today. So, there is substantial conservation and sustainable agriculture projects that are being delivered through the National Landcare program.
Senator CAMERON: Has funding been removed from any of these projects?
Ms Lauder : Not to my knowledge but I will confirm that. My understanding is we have regular milestones that they have to meet before we make the payment, so we normally make that judgment before we make the payment rather than removing funding from them.
Senator CAMERON: Do you make a judgment or do you do an audit?
Ms Lauder : We have a team in the Department of the Environment, so this is a joint program, who make assessments of whether or not the outcomes have been delivered to the milestone that has been stated, but it is not an official audit that is done for every milestone. They are audited financially on an annual basis.
Senator CAMERON: Audited financially but that is not the issue for me at the moment. The issue I am asking about is whether they are meeting their measures that they said they would meet?
Ms Lauder : On the whole they are meeting the measures. If any of them are struggling to meet them, if there are legitimate reasons, they can seek a variation from us and we will consider adjusting the milestone or the timing. Generally that is the approach. We have not had a situation in this current program of them either spending it on something that they should not or failing to deliver completely without communicating a reason like drought, fire or something.
Senator CAMERON: So, if they are faced with a drought or a fire that damages their capacity to deliver, do you just keep paying the money anyway?
Ms Lauder : No. We sit down with them and discuss what can be delivered. It might be changing the direction of the funding into a coastal project or something else and agreeing what the direction is and what we will fund them for if they cannot, with circumstances beyond their control, continue in the direction they were originally going.
Senator CAMERON: So, with the delivery of outcomes, does every one of these 56 regional projects self-assess or do you actual audit the 56 of them?
Ms Lauder : We actually do both. We now require them to do a self-assessment and then we consider that, but we also assess their delivery against the outcomes on a milestone basis.
Senator CAMERON: On each of the 56?
Ms Lauder : Yes.
Senator CAMERON: How many of the projects have not met their milestones?
Ms Lauder : I would have to take that on notice but my understanding is they are generally on track. I will take that on notice and confirm exactly.
Senator CAMERON: Can you also provide me with details of the milestones that have not been met in these projects?
Ms Lauder : Yes.
Senator CAMERON: Could you also then provide details of what remedial action has been taken by the department to assist to meet these milestones?
Ms Lauder : Yes.
Senator CAMERON: Have the Soil RD&E research priorities been released?
Ms Lauder : Yes. The minister released the National Soil Research Development Extension Strategy in March 2014.
Senator CAMERON: Has there been an audit against those priorities?
Ms Lauder : No, not at this stage.
Senator CAMERON: Will you be doing an analysis of whether these priorities have been met?
Ms Lauder : Yes, we will be doing an analysis. I cannot tell you, off the top of my head, after how many years that is planned to be done by.
Senator CAMERON: Will you take that on notice?
Ms Lauder : Yes, I am happy to.
Senator CAMERON: Have there been any problems with this research program?
Ms Lauder : It is a strategy that is identifying research that we are encouraging the range of research bodies across Australia to consider and to take on. We do not have a specific funding program to deliver it but we will do an audit after a number of years to look at progress and whether or not there need to be updates or changes.
Senator CAMERON: Are the priorities available?
Ms Lauder : Yes, they are available. They are on the department's website at the moment.
Senator CAMERON: Can you flick us the appropriate URL or wherever we go to on that?
Ms Lauder : Yes.
Senator CAMERON: Have you increased any coordination and collaboration amongst the organisations undertaking soil research?
Ms Lauder : It is not something that I could easily measure, but we have had regular meetings and discussions about priorities, work that is happening and ensuring there is a level of collaboration and communication so that there is no duplication.
Mr Glyde : The whole idea of those strategies is to try to coordinate the activities between the various RDCs that are involved, for example in this case in soil, the work that CSIRO might be doing and the work that the states and territories are doing individually, so the whole concept of those RD&E frameworks is to encourage collaboration and to make sure that we are not duplicating work and that we are trying to apply it to the nation's priorities.
Senator CAMERON: Is the Soils for Life program linked to this at all?
Ms Lauder : No, it is not.
Senator CAMERON: What is the expenditure for Soils for Life?
Ms Lauder : I do not think that I have that with me. This department provided some funding to Soils for Life a number of years ago, possibly three years ago, so I will have to take on notice how much we provided. We provided funding for a pilot of 20 case studies that Soils for Life were doing and they were completed and published.
Senator CAMERON: Have there been any updates since that published material?
Ms Lauder : Major General Jeffery is linked to Soils for Life. I think they work for him so he has been pushing that. My understanding is Soils for Life is in a bit of a hiatus at the moment but Major General Jeffery is the national soil advocate so he is still working to promote soil health and the importance of it.
Senator CAMERON: When was he appointed?
Ms Lauder : I do not have that information with me so I will come back to you, but it is two to three years ago that he was appointed.
Senator CAMERON: Do you have any details of the success of the green army in relation to farm work?
Ms Lauder : I am sorry I do not. The Department of the Environment delivers that program.
Senator CAMERON: Is there any engagement with your department?
Ms Lauder : No.
CHAIR: Who does that?
Ms Lauder : The environment.
CHAIR: They never get far out of town, I can tell you. They like to go around to parks and gardens.
Senator CAMERON: Where are we up to on the new fisheries policy framework?
Mr Neil : The department is continuing work on a number of policy initiatives in the fisheries space. We are in an advanced stage of a review of the harbour strategy policy document. We are also doing a review of the Commonwealth's by-catch policy and we are doing a broader reconsideration of an overarching fisheries policy statement.
Senator CAMERON: When can we expect some public progress on this?
Mr Neil : That will be a matter for the government. We intend to bring back to the minister the harbour strategy policy and the by-catch policy in the near future, with the expectation that those documents would move to public consultation subsequently if the minister agrees that the documents are ready for public consultation.
Senator CAMERON: What is the near future? Can you give me some idea of what that means?
Mr Neil : There is still some internal consultation to go with that, if that is successful.
CHAIR: He speaks as a bureaucrat with how you answer questions. He has been trained.
Mr Neil : This is trained evidence.
Senator CAMERON: I reckon they wasted their money.
Mr Neil : Thank you.
Senator CAMERON: I am only kidding.
Mr Neil : I hope the minister does not share that view.
Senator CAMERON: For the record, Mr Neil, I was only playing off the chair. I do not want to cast any aspersions on you.
CHAIR: We did not want you to take the bait but we thought it was worth a try, given that we are talking about fishing.
Mr Neil : Within weeks.
Senator CAMERON: What initiatives are in place and projected to support the recreational fishing industry?
Mr Neil : The government has announced and we have committed funding of $500,000 to the support of a national recreational fishing peak body. That funding is going to the Australian Recreational Fishing Foundation to undertake work to better develop their representational capabilities. The government has also announced a national recreational fishing advisory council. We are still in the process of establishing that body and we are in discussions with the minister about the membership of that body. Some people have already been approached and agreed to participate in that body.
Senator STERLE: Can you tell us who they are?
Mr Neil : I certainly could not tell you that until that body is finalised.
Senator STERLE: You are not allowed?
Mr Neil : No.
Senator CAMERON: So, when you say that part of the funding is to increase the representational capacity, how is that done?
Mr Neil : We have a contract with them for delivery of a range of elements to that.
Senator STERLE: I asked a question and I did not get an answer.
CHAIR: Senator Cameron, are you finished?
Senator CAMERON: I have another 15 questions here.
Senator Ruston: Can I provide some additional information to the committee?
Senator Ruston: The National Seafood Industry Association was the organisation to which the funding was granted to establish the national body, so they are the ones that are—
Senator CAMERON: This is the recreational.
Senator Ruston: I am sorry, the recreational fishing went to an independent consultant, Mr Brian Ramsay.
Mr Neil : There were two grants. One was to the NSIA to establish a national peak body for the commercial fishing industry.
Senator CAMERON: And the other is recreational?
Senator Ruston: Yes, the Australian Recreational Fishing Forum.
CHAIR: Are you sort of connected to the fishing side of the job? Between 2050 and 2070, depending on no human catastrophe, 50 per cent of the global protein task will have to be fish. Bear in mind that there are 14 and a half times the ocean to the masses above sea level. Are you planning the fish farming industry that will have to produce that protein? I mean there is a Chinese company that has just, two years ago, tried to buy up five 10,000 hectare lots of land up the Western Australian coast to put fish farming offshore. Do you deal with that?
Mr Neil : We have responsibility for aquaculture. Aquaculture is quite complicated. The regulation of aquaculture on a day-to-day basis is principally with the states because they have land management responsibility and water quality responsibility.
CHAIR: But should we be revising that, given that we sold Darwin lease for 99 years and they said it is a state? We just sold the land next to the ASIO building down here to a foreign country company. Should we now, given the future for the global protein task, not be talking to the states so there is direct connection between the feds and the states on the development of fish farms?
Mr Neil : The government has tasked the department to develop a national aquaculture strategy and that involves working with the states in the development of the strategy.
CHAIR: So, in due course, Mr Secretary, could you brief this committee on that?
Mr Quinlivan : We could.
CHAIR: Most people do not realise what a huge task, barring a human catastrophe, the global protein task is going to be. I think we have all had enough.
Senator CAMERON: This issue of funding just reminds me I have missed one area. If the departmental officers that handle this are not here then obviously you will take them on notice. Who handles the question of grants to assist small exporters?
Mr Quinlivan : We did answer a few questions on that an hour ago when the exports group was here.
Senator CAMERON: Yes. I am interested in a specific area.
Mr Quinlivan : I think we would have to take it on notice.
Senator CAMERON: That is what I said, if I have missed your people then you can take it on notice. I think there is $237,670 worth of grants. Is that correct?
Mr Quinlivan : It does not sound enough.
Senator CAMERON: For exporters?
Mr Quinlivan : Yes. It does not sound enough. I think it is best if you give us your question on notice and we will give you a proper answer.
Senator CAMERON: This is for the cherry industry.
Mr Glyde : There were grants provided to different agricultural sectors.
Senator CAMERON: Yes. When can the cherry industry expect that grant to be approved?
Ms Evans : Again, I will have to take that on notice. It will depend on what the terms are of the grant arrangements and whether or not they have met the milestones of the deed.
Senator CAMERON: Are these to help assist market access?
Ms Evans : They are for grants for a range of things. It could either be about a market access issue or it could be something to do with the way—although it leads to market access as well—their practices here in Australia that they want to try to improve to improve their prospects overseas.
Senator CAMERON: Do you know when the grant for the cherry industry was made?
Ms Evans : No. I will have to take that on notice.
Senator CAMERON: Is this the cherry industry season now?
Ms Evans : I look forward to it every year, so yes, it is.
Senator CAMERON: Cherries are underway.
CHAIR: It depends on where you are.
Senator CAMERON: Was there any thought given to trying to get these grants to the cherry industry to help them promote their crop this season?
Ms Evans : I will have to check whether there was anything specifically about this season in that arrangement, but all of those grants are about the long-term role of those industries. Again, I am sorry but I do not know the specifics of that one.
Senator CAMERON: I might have some questions on notice in relation to that. Thank you.
CHAIR: Ladies and gentlemen, that concludes today's hearing and in concluding today's hearing can I wish you all a very happy Christmas. I hope Santa Claus turns up. To the people up behind the glass there, thank you for putting up with us all day and deleting all the swear words. To the secretary, thank you for your patience and I will try to get you a flower for your hair next time.
Senator CAMERON: Can I just add the opposition's best wishes to the minister and the officers that have appeared here today. Have a good break. We will see you in February. Over Christmas just get ready for February.
Mr Quinlivan : We look forward to it.
CHAIR: It will be a breeze.
Committee adjourned at 18:47